Educate Consumers that Loans are Investments in the Future
Right now, in this current economic crisis that the world is facing, with an uncertain future, it can be challenging to convince many people that loans are actually a great investment in the future. Of course, that certainly all depends on the type of loan that one is talking about. Banks and home lenders have received a great deal of negative press and publicity during the past two years. With some of the nation’s (and the world’s) largest banks taking massive taxpayer funded bailouts to keep them in business, while millions of homeowners were tossed to the street during foreclosure proceedings, it can be easy to see how the public’s opinion of banks and lenders has been damaged.
Coupled with the current state of the economy, millions upon millions of families from one coast to the next are tightening their belts and trying to get themselves out of debt. Debt was a culture in America, and around the world, for decades and the restrictions on credit were loosening more and more leading up to the events that transpired starting in 2007 and are still wreaking havoc on the world today.
One of the wonderful side effects of this recession has been that people are spending money they don’t have, as they did in years past with reckless abandon. However, there are many of these same consumers who now believe that any debt, or any loan is something to avoid. However, we, in the industry, know full well that there is such a thing as good debt, or a positive loan. It’s time to start educating the public about these benefits once again.
Many different types of loans
Turn on the television today and you are bound to see a number of payday loan advertisements. These are generally extremely high interest (upwards of 1,500% or more!) and are only geared for short-term reasons, to get a person through an emergency, from one payday to the next. These payday loans are not a good investment simply due to the interest that is charged on them. A three hundred dollar loan can cost a person ninety dollars for less than two weeks. When a person doesn’t get the paperwork back in time, then the loan automatically renews for another two weeks, costing another ninety dollars.
Credit cards are obvious and with companies cracking down on late payers and delinquent accounts, jacking up interest rates across the board, people are shredding their credit cards in droves. Again, bad loans.
Then there are student loans, which can be good loans, or bad loans, depending on the terms and percentage rates that a person receives.
Lastly, there are home loans. There are millions of people who have never owned a home, but don’t feel as though right now is the best time to get tied to a home loan. They may worry about their jobs, how they will make payments, or they see the negative news almost on a daily basis about the millions of people who lost their homes, were denied modification terms, or were forced to short sell their home.
It’s incumbent upon us in the industry to dispel the myths and shake loose the rumors that spread about loans, modifications, short sales, and why millions of people are facing these factors today. Potential homeowners who are sitting back, waiting because they are frightened by what they see likely haven’t been told how great an investment a home is. Setting aside the housing bubble that burst three years ago, real estate is still the single greatest investment over time that one can make. With interest rates remaining at historic lows, a new homeowner could stand to make out like a bandit on a new home.
These potential homeowners right now are the future of the industry and if we don’t make a concerted effort to reach them, to educate them, and to encourage them to understand how some loans are worthy and wise investments in any economy, then we are going to continue to sit here and wait for the industry to make some kind of recovery.
David Reinholtz is a professional http://www.loanofficerschool.com Mortgage expert in Real Estate Industry David is also a sales and marketing expert and trains professionals in every career field. David has personally trained tens of thousands of loan officers, mortgage brokers, real estate agents and individuals through The Close More University Seminar Series, http://shop.loanofficerschool.com LoanOfficerSchool.com Classes , Correspondence and On Line Learning, and countless private engagements and training events throughout the country.
David is the Founder and CEO of LoanOfficerSchool.com, an approved education provider for The Conference of State Bank Supervisors and The National Mortgage Licensing Systems' (NMLS) required pre-licensing education and continuing education.
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