Actually, it's not. Borrowing money is the sole responsibility of the borrower, who decides how much money he wants to borrow based on the impact it will have on their finances.
For a loan to materialize, the borrower needs to be aware of how much it will cost him and for how long he will have to repay or service the loan.
That's all the borrower's responsibility.
Only after the borrower is aware of the immediate and long-term impact of his actions will the borrower petition a lender to execute the loan. The lender's only role in the deal is to double-check the borrower's assumptions to ensure the borrower is actually capable of keeping his word and pay back the money he is borrowing.
It's also extremely disingenuous to criticise higher interest rates as they are a safety mechanism that reflects the borrower's ability to repay future loans, and are supposed to act as pressure to dissuade the borrower from digging himself into a finantial hole.
> You shouldn’t just blame on party of the two party interaction.
That's simply wrong on so maby levels. The only part who holds any form of responsibility is the borrower. He's the one making the decision to ask for more loans being fully aware of his financial situation and the impact the new loans have on his cash flow. He is the only part of the arrangement who actively petitions for the deal and has full and complete access to his economic state. The borrower is the only part who has the legal power to sign on the loands. The borrower is the only part who actively seeks the loans and actively engages with each and every single lender in the world to fulfill his desires for more debt.
Your belief about the state of knowledge of borrowers is wrong. I teach mathematics at a community college and it is clear that a knowledge of percents and the impact of compounding is lacking in a large portion of the population. In my state a state senator once claimed that since funding to the college system was increased 5% after a 5% decrease this meant that the college system’s funding had been fully restored. Do you understand why this indicates that the state senator doens’t understand percents? Do you see the error? Most people don’t.
There are lots of cases where borrowers do not understand all the terms of the loan. Have you read and understood every single loan document you’ve signed? I doubt it. Your belief that only the borrower actively seeks loans is can easily be dispelled by watching TV and seeing ads for loans.
It’s hard to understand how you can write
Borrowing money is the sole responsibility of the borrower...
And the write
The lender’s only role in the deal is to double-check the borrower’s assumptions to ensure the borrower is actually capable of keeping his word and pay back the money he is borrowing.
Today I learned that lenders cannot deny loans, poor souls forced to give money away to everyone that asks for it, without any kind of background checks.
Lenders can deny loans and they can also reflect the risk in the interest rate. However, lenders only provide their input after the borrower evaluates the impact of a loan on their finances and decides based on his evaluation that he clearly and unambiguiusly is willing and capable of servicing and repaying such a loan in full. Only after that decision is expressly made by the borrower can lenders be involved, and their involvement is restricted to rubberstamp the deal decided by the borrower.
Actually, it's not. Borrowing money is the sole responsibility of the borrower, who decides how much money he wants to borrow based on the impact it will have on their finances.
For a loan to materialize, the borrower needs to be aware of how much it will cost him and for how long he will have to repay or service the loan.
That's all the borrower's responsibility.
Only after the borrower is aware of the immediate and long-term impact of his actions will the borrower petition a lender to execute the loan. The lender's only role in the deal is to double-check the borrower's assumptions to ensure the borrower is actually capable of keeping his word and pay back the money he is borrowing.
It's also extremely disingenuous to criticise higher interest rates as they are a safety mechanism that reflects the borrower's ability to repay future loans, and are supposed to act as pressure to dissuade the borrower from digging himself into a finantial hole.
> You shouldn’t just blame on party of the two party interaction.
That's simply wrong on so maby levels. The only part who holds any form of responsibility is the borrower. He's the one making the decision to ask for more loans being fully aware of his financial situation and the impact the new loans have on his cash flow. He is the only part of the arrangement who actively petitions for the deal and has full and complete access to his economic state. The borrower is the only part who has the legal power to sign on the loands. The borrower is the only part who actively seeks the loans and actively engages with each and every single lender in the world to fulfill his desires for more debt.