Is an HYIP as a Loan Program?

If you one who see a high yield investment program as a loan program, then here is what your main concern should be:

1. That HYIP, the borrower, pays you an interest on the principal amount you loaned him, and
2. The the HYIP returns your principal amount at the end of the term of the loan.

In the lending industry, the likelihood of a borrower repaying your money depends largely on two important factors: (a) the integrity, and (b) the financial situation of the borrower.

When you lend someone money, there can be no guarantee that you will get repaid. In effect, your deposit to an HYIP is not just a loan, it is an unsecured loan. The borrower (HYIP) puts up no collateral that you can claim and sell if the program defaults on the loan.

Compared to other lenders, you have another disadvantage in the HYIP loan business: there are no collections department; you have no collections company, and there is no credit reporting agencies for you to report the deadbeat borrower to! In fact, most often there is no loan contract between lender (you) and borrower (the HYIP).

Therefore, if you decide to be a HYIP lender, you must, like your fellow creditors (banks, etc), learn how to write off bad debts (HYIPs that don't return your funds). Otherwise, you will find yourself 'closing store' or calling lawyers, which can result in more even more frustrations, stress and loss.

Actually going to court against HYIPs will only cost you more in time, emotional currency, and money than the HYIP game itself. Imagine a bank taking every bad borrower to court! That's what you'll be doing if you choose to take legal action against every HYIP that goes out of business before you've made your money back.

That's why it is absolutely crucial for you to find a way to screen each potential borrower (HYIP) as much as a bank, Master Card, Visa, or a store will screen someone who applies for a loan, credit card, or line of credit. There are few tools available online for screening and grading HYIPs to find those honest borrowers.

Click here for an ebook that features the HYIP Grade Sheet.