Three Reasons to Pay Back That Old Personal Loan

[Jan 14, 2010.]

 

Many people unfortunately find themselves in the situation where they have ten bills stacked on their kitchen table, and only enough money to pay three or four. Often, if an unpaid personal loan is one of those bills, it tends to not be paid as quickly as, say, the electricity bill.

Some unsecured personal loan recipients take this a step further and just decide not to pay back the loan at all, not even make any effort to contact the lender, and just say forget it.

Here are three reasons why it may be smart to make an attempt to pay back that personal loan gone bad:

1. Integrity Is on the Line Here

Let's be honest, people who completely skip out on loans have done an incredible amount of damage to the U.S. economy and, frankly, American society in general.

Once forfeited, integrity is a difficult thing to recover. That unpaid personal loan may not seem like a big deal, but to the extent that it is an expression of integrity, it absolutely is a big deal.

2. Credit Issues

Some borrowers may feel like it's too late to worry about credit reports, but that, too, can be a problematic approach to this problem.

Unsecured personal loans are not necessarily based on formal credit reports, but personal lenders do communicate with each other. For this reason, once a personal loan is not paid back to one lender, going across the street--or to another website--to get another personal loan isn't likely to be easy.

Losing the ability to get any kind of credit is a tough situation to be in.

3. Stuck Money

The expression "stuck money" refers, quite colorfully, to the idea that owing money is a common reason for not being able to move freely in life. This can be the case with an unsecured personal loan gone bad.

In addition to the psychological side of inertia, roadblocks to rebuilding the finances can be numerous when there are unpaid personal loans out that don't receive any attention. For example, personal lenders may try to levy bank accounts or take uncooperative borrowers to court.

This article is not meant as a scold to people who cannot currently pay back a problematic personal loan. Rather, these words are meant to encourage borrowers to do their best to pay back a personal loan if at all possible because there are at least three really good reasons to make that effort.

 

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.