Bad Debtors - Curse to Lenders
NS0-510 No lenders want to be plagued by bad debts that have no ability to pay off their loan. Everyone wants extra money for something, but the problem really starts from the lenders' end when they offer to lend money to people with no credit history. Instead, the lender should ensure that the borrower can pay back the money without hardship.
NS0-101 By finding out what the borrower is actually making and what other debts he is paying off, the lender will get a much better idea of whether this person will make a good customer - whether he can pay off his loan. If those details are not available, then the lender should refuse to give the loan.
NS0-163 Instead, many lenders simply increase the interest rate, making it even harder for the loan to be repaid. They also force the borrower to take out mortgage insurance that covers the lender - not the borrower. The borrower thus is hit with all this extra money to pay out when he is the very one that will find it the hardest to pay.
No one wants to be unable to pay his debt. Non-payment means loss of the asset he had hoped to purchase. In many cases this is the family home, or it could be a business, a car or any other thing for which the loan was required. In short it is the loss of a dream. For the person who cannot pay, it also means the loss of any money that has already been paid - and bad credit to boot. It is this reason that lenders take the help of debt recovery or debt collection agency to get their money that seems to have gone bad.
So while bad debtors are certainly a curse to the lender, there are steps that he or she can take to avoid them and make sure they only lend to those that can pay back what they borrow. Meanwhile - unlike the borrower, they have that mortgage insurance to fall back on.
NS0-101 By finding out what the borrower is actually making and what other debts he is paying off, the lender will get a much better idea of whether this person will make a good customer - whether he can pay off his loan. If those details are not available, then the lender should refuse to give the loan.
NS0-163 Instead, many lenders simply increase the interest rate, making it even harder for the loan to be repaid. They also force the borrower to take out mortgage insurance that covers the lender - not the borrower. The borrower thus is hit with all this extra money to pay out when he is the very one that will find it the hardest to pay.
No one wants to be unable to pay his debt. Non-payment means loss of the asset he had hoped to purchase. In many cases this is the family home, or it could be a business, a car or any other thing for which the loan was required. In short it is the loss of a dream. For the person who cannot pay, it also means the loss of any money that has already been paid - and bad credit to boot. It is this reason that lenders take the help of debt recovery or debt collection agency to get their money that seems to have gone bad.
So while bad debtors are certainly a curse to the lender, there are steps that he or she can take to avoid them and make sure they only lend to those that can pay back what they borrow. Meanwhile - unlike the borrower, they have that mortgage insurance to fall back on.
|
|
