Do You Know What The Definition of Personal Inflation Rate Is
On one of our other loan and finance web sites I was asked the question, “what is a personal inflation rate”. I am very happy to say that it is a very simple concept and one that you don’t need to spend a lot of time trying to understand. I know that many banking terms and definitions can be complicated and frankly quite baffling, but in the case of a personal inflation rate it’s very easy to get a grasp on. Arguably, you don’t even need to really know what a personal inflation rate is because the banks will likely not turn you down for your loan based solely on your PIR.
To understand your personal inflation rate all you have to do is take a reasonable look at your financial future. Are you going to be faced with bigger monthly payments and financial responsibilities in the near future and the long-term future? That is the question you need to ask yourself here. Lenders in banks always wanted lower their risk when lending out money. As you know in today’s economy the banks are very nervous about lending money to people who are high risk. Some would argue that the odds of getting a loan with bad credit or a really high personal inflation rate are not likely – I don’t necessarily agree with that.
You can be assured that your approval will depend on many many different scenarios, criteria, and over all hypotheticals. For instance, if you are on the verge of a divorce the banks are going to see you as tainted goods, and your personal inflation rate skyrockets. It’s maybe not a great idea to tell the bank that you think your wife is a complete bitch and is in the process of screwing every man of the neighborhood except you. First of all, that is a really embarrassing thing to admit and it will completely tank your possibilities of getting approval. Divorce is very expensive and changes everything – not just your personal inflation rate. Telling the bank that you are going to get a divorce and that you have six children to feed and your likely to be unemployed in the next three months might get you some serious sympathy from a loan officer but they will be putting down their pen and there will be no underwriting going on. This is a classic example of a horrible personal inflation rate.
Now it is time for a better story. If you are happily married with a spouse that you have been married to for decades and your financial house is in impeccable order the banks will assume that your personal inflation rate is very very very low. This is good news as it is a lot better for you to be in this position in all respects. As I have mentioned in other articles, who you choose to spend your life with has serious ramifications in all aspects of living, finances notwithstanding. If you are like the poor man in the first example just think about what a drag that would be. First of all your married to a complete bitch, the bank will lead you a cent, your are screaming for more more more, and your personal income is about to dry up. At that stage it is time for a radical reconfiguration of your personal finances.
Some next time you’re bank, banker, or loan officer mention the words personal inflation rate you will know exactly what they mean. You can impress upon your loan officer that you have taken all measures to secure your financial future and are prepared to handle the future growth of your family’s expenses. If you’re one of those peoples that it is in a healthy relationship and have team approach to personal financing and your personal inflation rates are quite low I congratulate you. If you are like the latter example my heart goes out to you. Good luck, and do yourself a favor and find a nice spouse to live with.
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