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Personal Signature Loans and The Art of Borrowing

December 18th, 2008 by Dave Davis

by Mark Lundersenn

Many of the problems in the world financial system right now are due to the widespread misuse of credit. It all really comes down to the Art of Borrowing, and as a nation (and world) we’ve been going about it all the wrong way. We’re borrowing way too much relative to our income; we’re saving less than 0% of our earnings, and we’re headed down the path to financial destruction.

Residential real estate, and all the abuses on the both sides of the transactions, is the most glaring indicator of how ridiculous our country has chosen to behave itself with respect to credit and lending practices. A plumber earning $54,000 per year has no business borrowing $400,000 to buy a home; he’ll never be able to to keep up with the payments. And now the taxpayers of the world, most of all those who have kept their mortgage current by not borrowing more than they could pay back, are footing the bill.

All we can do is learn the lesson, which is that you should only borrow money wisely, and for profit. And by those rules, you really have no business ever borrowing money via personal signature loans, or any other short term borrowing vehicle. In fact, you should avoid them at all cost if you can possibly help it.

Why not? Well, because these types of loans nearly always carry terrible interest rates and bad terms. If you choose to borrow cash in this way you can end up paying in excess of 100% interest as well as hundreds of dollars in fees. How could that ever be a smart move?

So, it’s always going to be a terrible move, but sometimes I suppose using these kinds of loans will be unavoidable. You might lose your job due to an unfair boss who fired you just because you nicked his car pulling out of the parking stall at the office. Next thing you know you’re out of a job.

In spite of how unfair the firing is, there may not be a whole lot you can do about it. What are you going to do – sue him? The reality is that in a lawsuit, nobody wins. And how are you going to pay a lawyer anyway?

So what can you do? You’re out of a job, your creditors don’t care, and the American taxpayers aren’t going to bail you out unless your name is AIG or GM. Your only option is to borrow money from friends, family members, or even the loan store on the corner.

Here’s my advice: borrow the absolute minimum you need to get by until you and secure a new job and your next paycheck. And take any job you can get – in this economy we can’t really afford to get greedy or picky when it comes to making a few bucks. For the next few years it’s in all of our best interest to do whatever is (legally and ethically) necessary to feed our families and keep our bills paid.

About the Author:

Internet loan seekers should check out Mark’s site for information on finding unsecured signature loans if they want to secure a signature loan online for short term loans.

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