Why aren’t there locked prepaid interest personal loans?

[MadManofBethesda]

Originally Posted by Freesponge

I’m talking about a situation like this?

It’s win-win for debtor and lender.

Suppose interest rates are expected to rise. The debtor is interested in seeking a personal or business loan to cover a pertinent expense at a later time into the future. The debtor does not want to hold onto the money till the exact time the debtor needs it

But the debtor also fears that future interest rates will be much much higher and wants to fix a lower APR. To offset this risk, the future debtor is even willing to pay smaller monthly fees while waiting on the push button to start the loan transaction.

The debtor also is aware the debtor could save own money over the meantime and maybe not need to take as big a loan when the time comes, but the debtor prefers for that money to be prepaid to the lender before the loan even begins, so that it’s all one lump sum transaction of the face amount.

Is there any such products out there where you can pay say $150
A month for say unlimited months and the longer you take to pull the proceeds, the lower your APR and after enough time of waiting you in essence just get the proceeds paid right back to you ?



It’s really like the same as saving own money and applying it to reduce the amount you would otherwise need to borrow, but this would have a psychological benefit to debtors who tend to mismanage Personal money saved , by instead tying it up where it can’t be misused by the debtor but guaranteed to be used to alleviate the future cost of borrowing

Originally Posted by Freesponge

Not a homeowner I wish I was

The concept I’m after might be for a younger and/or less mature crowd. It’s simply the crowd that has no problem paying hundreds a month for cars, phone plans, gym memberships, but if they put that money into a personal savings account , they can’t help touch it as spending money, whether something they think they need but don’t, or little bits of replenishing a low discretionary budget and it builds up till they eat it before it grows




Instead …. An ability to pay equity with cash straight into a lender who then is under contracted not allowed to return the funds till a certain fixed date and only may use those funds to alleviate a borrowing rate on loans of a larger size. Your interest rate will be reduced by the collateral but the debtor will not see it that way , debtor will see it as they negotiated a discounted off market APR interest fixed loan

The product being offered is “the option to receive a pre-approved loan at a much discounted interest Rate and after the option expires …. Then they get their money back plus some smaller interest return… which will be perceived by the lender almost as being like a tax-free grant

You have way too much time on your hands.

[oceangaia]

Originally Posted by Freesponge

The product being offered is “the option to receive a pre-approved loan at a much discounted interest Rate and after the option expires …. Then they get their money back plus some smaller interest return… which will be perceived by the lender almost as being like a tax-free grant

One of the many flaws in your idea is that a loan approval would be based on the criteria at one point in time and a few years later that criteria might have vastly changed. Maybe you have a $100k/yr job now and are unemployed later? Maybe you have an excellent 800 credit score now but a few years later you have a 600 score with chargeoffs? You're asking a lender to fork over a loan at some point to a person who may not be remotely qualified or able to repay it at that time. And likely at a loss with the rate lower than market. Way too much risk for too little reward. At a bare minimum, the final approval of the loan would have to be contingent on qualification at the time the loan was executed.

[karen_in_nh_2012]

OP, if you spent as much time WORKING ON your life, your job, your credit, etc., as you do posting silly threads on C-D (most of which you rarely or never go back to), wow, just IMAGINE how much you could accomplish.

Seriously.