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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
If you have equity in a home you can take out a home equity loan HELOC at today’s rates and pull money out later. But, you are using your hypothetical equity to secure the loan.
If you have equity in a home you can take out a home equity loan HELOC at today’s rates and pull money out later. But, you are using your hypothetical equity to secure the loan.
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
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
Sounds like a ridiculous idea so you should put your money into starting up such a venture and you'll find out why one doesn't exist.
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
".....they can't help but touch it as spending money...."
Yes, they *can* help by exercising some financial self-discipline even if it takes a few painful mistakes to learn how to better manage money and how to determine wants versus needs.
I have zero patience and little pity for those who refuse to live within (or better yet, beneath) their means.
It works a bit different, but layaway is a similar concept. While you won't get a blank check from a bank as a personal loan to buy whatever you want, certain stores may have layaway plans tied to a specific item or items. Each brick-and-mortar store or online retailer that allows it will have different lengths of time for repayment, and there may or may not be fees for nonpayment, or other rules surrounding how they will give you your money back should you decide not to buy the item(s).
Businesses do that all the time with interest rate swaps. However, if you know how to do an interest rate swap, you already have enough money for any personal loan you might want.
It works a bit different, but layaway is a similar concept. While you won't get a blank check from a bank as a personal loan to buy whatever you want, certain stores may have layaway plans tied to a specific item or items. Each brick-and-mortar store or online retailer that allows it will have different lengths of time for repayment, and there may or may not be fees for nonpayment, or other rules surrounding how they will give you your money back should you decide not to buy the item(s).
Most businesses only do layaway during Christmas and it's a very short term layaway of about 30 or so days.
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