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Personal Loans Can Change Lives for the Better

[Aug 18, 2009.]

 

Social lending organizations like Kiva.com make the case explicitly: personal loans can change lives for the better. But the good a personal loan can do is not only confined to charity-focused activities. Unsecured personal loans can do real good in the real world even if they're given by a for-profit organization.

Used correctly by the borrower, an unsecured personal loan can be a life-changer.

Kiva and Pro Mujer Making the Point Loud and Clear

A visit to the Kiva Web site really drives home the life-changing aspects of personal loans. Complete with pictures of aspiring entrepreneurs from places like the Democratic Republic of the Congo and Venezuela, it is readiliy apparent that a loan of just $250 or $500 can change a person's life and give them a chance to lift themselves out of poverty.

This "teach a man to fish and he'll never go hungry again" approach to personal lending has gained popularity thanks to the successes of organizations like Pro Mujer, a not-for-profit microfinance organization that focuses on helping Latin American women become successfully self-employed.

The public recogniton afforded these agencies has generated good publicity for a personal lending industry that has also received its fair share of negative publicity.

Personal Loans and "Up by the Bootstraps"

Unsecured personal loans have formed the foundation of many a giant corporation. Bill Bartmann, for example, started a debt collection agency called CFS from his kitchen table, with the help of a $13,000 personal loan from a bank that he already owed a lot of money to from a previous failed venture.

That kitchen table company eventually grew into a 3,900 employee collections company that helped more than 4.5 million people settle their debts with honor.

Unsecured personal loans are often the initial "bootstrap" in the famous "pull yourself up by the bootstraps" tales of business success. Without personal loans, the world of entrepreneurial dreams would be a dramatically less rich place.

Borrower Responsibility Key to Best Use of Personal Loan Funds

Personal loans, like any financial product, can be misused. Borrowers considering taking out a personal loan to start a business must be prepared for not only the loan but the business.

By taking the time to lay out a plan and showing the dedication to stick to that plan or even adjust it as situations require, personal loan borrowers can make the most of the opportunities before them.

 

About Author:

Andrew Freiburghouse is a writer and businessman. He has worked as a magazine reporter, tax preparer, screenwriter, copywriter, and loan officer. He graduated from Santa Clara University in 1999 with a B.A. in English. Andrew was born and raised in the City of Los Angeles.

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