Social Lending

Why It’s Even More Important To Pay Back a Social Loan

Have you joined the social lending revolution already? If you have, then you already know that it’s one of the best ways to get a loan when all other sources seem blocked off to you. Instead of being just another number in the game, you become a person with a problem that the community is more than happy to try to solve for you. This is the best outcome you can get, and it really pays off.

However, because it’s social lending, it’s very important that you pay for your loan in a fair amount of time. You usually know your term upfront, so this will help you crunch numbers and come up with an estimated monthly payment. The last thing that you will want to do is try to just jump in and get the loan, then not pay it. This would be a high breach of trust, and its effects go deeper than you might thick.

Let’s play the scenario out for a moment: you borrow 3,000 to pay down some credit card debt. The interest rate on the new social loan is much less than the credit cards would be, so you’re getting a good rate all around. Unfortunately, you run into a tight month and decide to skip over your loan obligation. What effect does that really have? A lot, actually. For starters, it means that the lender that helped you fund the loan doesn’t get pad. You never know who is relying on the money that you’re paying back. The principal plus the interest could be something that another family is counting on as part of their monthly budget. On the other hand, you might be sending a message to a first time lender that there’s no bright future in social lending, because no one is willing to keep their word.

Even if you skip over the effect you have on others by doing this, you can’t overlook the effect you have on your own future. When you’re trying to get out of debt, the last thing that you want to have more negative information coming up on your credit report. That tells all future lenders that you’re really not a suitable candidate for credit at all. It’s better to think about how your reputation will be through your actions than to do something that would affect your future so greatly.

It’s easier than you might think to pay your loan. There’s no need to try to fight to write checks, or fight to figure out how you’re going to find stamps to mail off your payment. You can actually pay online or even have the payment automatically deducted from your checking or savings account. This is something that can really come in handy, so you don’t want to try to overlook it.

Anything that you can do to pay your social loan back on time will make it clear that you are truly a person of your word, which is something that everyone wants to be anyway! Why not get started today?