Make Money Buying Bad Loans? You Must Be Joking!

This is no joke. you can make money buying bad loans. And here, in a nutshell, is how it works...

After doing your research, you purchase a set of loans for literally pennies on the dollar. And then you collect nickels, dimes and quarters on those loans. The premise couldn't be simpler.

But why would someone pay me rather than a bank?

Banks have to abide by certain rules and regulations which limit their flexibility. After a loan goes unpaid for certain length of time the bank has to write off the loan.

It then sells the loan to a debt collector and this can be an agency or even an individual. At present, the sheer volume of loans has driven the price of the loans way down.

So let's look at potential profit margins for a loan package with a face value of $100,000 (say 20 loans of $5,000). Consider the scenario where you pay 5 cents on the dollar for the loan package and you hire a collection agency that you pay 1/3 of your profits. Further, say the agency is able to collect 15 cents of the dollar this would leave you with a profit of 5 cents on the dollar.

Face Value of Loans = $100,000
Collect at 15% = $15,000
Less Purchase Price (5%) = $5,000
Less Collection Fee (33.3%) = $5,000

Profit = $10,000

This is just an example and while it demonstrates what is possible it does not necessarily represent typical results.

However, I hope that you can see the potential of making money buying bad loans. And this is extremely scalable.

The world is currently undergoing an economic crisis. And this is not being negative or pessimistic. It's simply stating a fact.

However, there are many individuals who are doing well in this economic climate. And you can be one of those individuals to profit during this recession by buying bad loans for pennies on the dollar and, at the same time, help others who have found themselves in a difficult financial predicament.

You may be thinking that you'd be taking advantage of such individuals. However, you'd actually be doing them a favour.

Take the case of Susan. Susan has such a large credit card debt that she can no longer meet the monthly payments. The credit card company is hounding her almost on a daily basis but she just doesn't have the funds to increase her payments.

Then a debt collection company contacts her. She is both wary and weary for she's at her wits end trying to resolve her current situation. The person who speaks to Susan is polite and understanding of her predicament. Susan is offered a range of different and more flexible payment options and among those options is one which she can actually meet. She agrees to this new payment plan and agrees with the debt collection agency to review this plan periodically.

Alternatively, Susan may be offered the opportunity to clear her debt at a significant discount. And it may be that she's able to raise this smaller sum of money and clear the debt once and for all.

It's a big weight off Susan's mind. However, it also means that the debt collection agency makes a profit on this particular debt.

So if you'd like to learn more about how you can make money buying bad loans while helping others out of a financial predicament click the link below for a FREE video which explains this opportunity in greater detail:

FREE Video: "How to Make Money in a Bad Economy"