Anyone who has an older sibling likely has some familiarity with a “game” called Stop Punching Yourself.Â At the time, I didn’t see much fun in it.Â Many years have passed and it seems like I’m still playing it.Â How so?Â Allow me to explain.
It’s starting to get difficult for me to find good loans on Prosper.com.Â Currently it seems there’s more lenders than borrowers.Â It occurred to me today that a good portion of the people there are trying to dig themselves out of credit card debt.Â So is it possible that I have credit card debt to thank for the good interest rates I’m seeing there?Â I think it is.Â I should be doing everything I can to encourage people to live for today and build up more credit debt.Â However, here I am with a website writing daily about how people can manage their finances better.Â I can’t stop punching myself.
Well, you can take heart in the fact that 99.99% of the people who dug themselves into credit card debt are very unlikely to actually try to do anything about it, or to change much about their financial lifestyle other than getting a Prosper loan or something similar. Most of us bloggers are pretty much preaching to the choir here.
This is the current situation for anyone who has money to lend out right now. We see it in real estate- hard money lenders are scambling to find who is still making money in real estate and seeking them out. Banks are having a much more difficult time as far as the number of loans coming through being far less than it has been.
Kira, you’re right, which is why I don’t mind. There are more than enough people in debt in the US to keep my Prosper loans going for some time. I do realize that sometimes we are preaching to the choir, but people walking might give a listen here and there, so I hope they like what we have to say. :-)
prlinkbiz, real estate is tough right now. Part of me wants to go on a buying spree and wait five years for the market to swing in the other direction.
It’s actually true with the hard-money lenders – we’re in a couple of hard-money partnerships and things have dried up rather badly in recent months. Our commercial-loan partnership is still doing well, but the residential loan partnership is only finding a few loans.
The flip side is as RE tanks, hard money lending will pick up as the people who buy houses at auction and such will need access to capital. But RE has “paused” for the moment, and “pauses” are the worst times for hard money lending.
Finance Junkie says
Credit card consolidators are my favorite. Here’s why and when:
(1) The first step is to admit you have a problem. If they admit they had a problem and appear sincere, I’ll seriously consider lending to them. Many of us have in the past felt “in over your head” or “tough making ends meet.” The trick is identifying those that have hit the inflection point and are on their way back to financial security.
(2) If they simply state “credit card consolidation” and do not address their problem, I must assume that they are consolidating their debt in order to continue their past consumption patterns.
(3) I do not like funding business loans where their loan interest rate is higher than what I perceive to be their profit margin. If I was to fund these types of loans, it’s like saying “I don’t mind gambling on a losing proposition.”
Keep up the good blogging!
I actually tried to produce graphs that showed good loans were hard to find. I couldn’t do it. My graphs all looked like the same good loans as always.