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>Just cause of collateral. You can impound a car, foreclose on a mortgage, sell it and get back much or most of your money, which is why rates can be a lot lowe
by samhain 7y ago
>Just cause of collateral. You can impound a car, foreclose on a mortgage, sell it and get back much or most of your money, which is why rates can be a lot lower.
If it follows that the interest should be higher on a more risky investment, then why are student loans (that are unforgivable) not essentially free? As they should be basically a zero risk investment since they follow the person around forever, through bankruptcies etc.
- IkmoIkmo 7y agoUnforgiveable doesn't mean it'll be paid back. If someone goes bankrupt and can't forgive a loan, it's more likely that they'll continue to miss interest payments while also never paying back the principal, which just keeps building up. Typically loans line that get written off internally as a loss, or sold at a loss to a debt collector, even if the loan isn't forgiven to the borrower, it'll be a loss and therefore a risk event for the lender.