What are the General Parameters to Consider when you want to be giving out secured and non-secured loans as a start-up?

[Carson20t]

Giving out payday loans is a very lucrative business especially if you have some funds laying around for some months. Then the more reason you should lend it out so that it makes for you a 25 per cent to 30 per cent interest per month. But the challenge remains on the aspect of people defaulting and this normally results in conflict and loss of business.

To be helped, it is important to identify the general parameters that one must look at if they are to be giving out payday loans both secured and unsecured loans. What are some of the general parameters to consider?

 

[cherry123]

The most is to look at the financial capabilities of the borrower. As an individual look at their credit score and as a company look at the balance sheet to know their financial status.

 

[Carson20t]

It is well known that if a business is doing well and or if an individual has a stable income base then they can easily pay back the loan that they contracted,but then through experience how can one prove that someone will pay back more especially if we are talking about pay day loans that are unsecured?

 

[cherry123]

it is good to look for one with a good level of income or one with a stable income base that they can easily pay back the loan to give out to.

 

[Carson20t]

it is good to look for one with a good level of income or one with a stable income base that they can easily pay back the loan to give out to.

That is very true,what would you need to look at more especially if it is an unsecured loan.Talk more or less you can not easily reach the person who is applying for a loan.For example giving out to someone you only know online.

 

[cherry123]

Giving out unsecured loan is most risky as you don't have anything of the borrower to hold on to. You need to be sure that the person is really trust Worthy

 

[Carson20t]

And that they have something that you can pin them on right?but then even if you get their basic information like real names,occupation and residential address.The fact still remains that them knowing you are far away will still make them greedy and entitled to what was suppossed to help them but then selfishly refuse to pay back.these are people who are not quality people and are poor in planning.

 

[cherry123]

This is why it is good to gauge ones credit worthiness before you give out especially an unsecured loan. At least with a secured loan you can fall back on the collateral provided

 

[eldavis]

Always make sure you have all their information, from their location to also their friends and family, i have seen cases where people borrow loans and they refused to pay, they where only able locate person and get their money back through his family.

 

[Carson20t]

Always make sure you have all their information, from their location to also their friends and family, i have seen cases where people borrow loans and they refused to pay, they where only able locate person and get their money back through his family.

This sounds interesting that the person must have a guarantor who will stand for them just in case of anything. I also like the fact that the person must provide the necessary information that will guarantee they are easily located or traced in an event of anything.

 

[Etini Willie]

You must consider what the person wants the loan for if it is productive enough to generate money that can be used to payback the loan. Also, you must make sure you do a kyc in case the person wants to act funny.

 

[Passiveearner]

Well, I think that before taking a loan in the first place, the very first thing you need to understand and realise is whether or not you actually really need to take loans in the first place.

 

[cherry123]

Yes the borrower must present a guarantor. I know about this a lot who will stand for them to surety them of their debt. the borrower must provide the necessary information that is needed as well

 

[Carson20t]

Well, I think that before taking a loan in the first place, the very first thing you need to understand and realise is whether or not you actually really need to take loans in the first place.

This is very true although at times we contract bad debt because we are just under pressure to revive a new business that has been affected directly or indirectly meaning there are market forces that can shake the business due to natural factors but there are also market forces that can be created by company members or other people that can compromise the planned cashflow and may force one to borrow. The same applies in individual lives that there are factors that can force one to borrow meanwhile they may likely not pay back because the resources have been channelled to non-income generating needs or wants.

These are the critical indicators that make us spend and not invest or save income and hence the reason why most of us are struggling to walk to financial freedom right now.

 

[Heatman]

Honestly I don't have any knowledge on whatever that is required or parameters that are being observed when processing a bank loan because it is not something that I have ever been interested in making use of my business or other personal needs.

 

[Carson20t]

Honestly I don't have any knowledge on whatever that is required or parameters that are being observed when processing a bank loan because it is not something that I have ever been interested in making use of my business or other personal needs.

Wow, that is an awesome principle and it surely will make you go a long way in your business and personal journey to financial freedom. I must say though that at times borrowing is not all such a bad idea. It shows that you are a good business person when you borrow. That is the only way you can build your credit score.

I have seen most successful businesses borrowing. Take for example all the companies that list on the major stock exchange and wall street. They promise to give stakeholders dividends. That is borrowing in some way. To have good debt is okay but to have bad debt is a terrible mistake. The banks have more strict measures and can never give unsecured loans but some payday loans are given by money lenders and at times they give unsecured loans.

 

[astutimeliana723]

I usually try to find out what the reputation of the person/company we are going to give a loan to is, what is their track record, whether he is a trustworthy person. If it's a large loan, I'll ask for a guarantee just in case, don't forget to make a black and white agreement and stamp duty so that it has legal force.

 

[Springtime]

I personally am not interested in lending money business. I do not know what to do if the borrower does not pay back on time. I know I can sue him/her but I also need to pay for legal fees.

 

[Carson20t]

I personally am not interested in lending money business. I do not know what to do if the borrower does not pay back on time. I know I can sue him/her but I also need to pay for legal fees.

This is an excellent strategy as well, the thing is that if you can avoid a mess turn out then it is wise to do just that. Some people are such people that are not quality and by all means, avoiding them is a very good and right thing to do. So avoiding a possible dispute is a good thing as well because it can cost you in the event of trying out the possible way of recovering your own money.

 

[Passiveearner]

Yes the borrower must present a guarantor. I know about this a lot who will stand for them to surety them of their debt. the borrower must provide the necessary information that is needed as well

If a borrower of funds is not able to present a guarantor, then they could possibly offer something as mortgage as well. This may help people a lot when it comes to borrowing money. people should seek interest-free loans.