NINJA Loan
Categories: Credit
Silent as a mouse, dressed in all black (like the movie, MIB: Mice In Black), we stealthily scale the wall of our local bank branch. Once on the roof, we manage to sneak into the building’s ventilation system without making a sound, only to pop through the air vent in the branch manager’s office 30 seconds later. “We’re here for a NINJA loan,” we tell him as we start throwing knives around, “because, as you can see, we are a ninja.” At this point, the branch manager informs us of two things: one, NINJA loans aren’t really a thing anymore. And two, even when they were, they had pretty much nothing to do with actual, real-life ninjas.
“NINJA” stands for “no Income, no job, no assets,” and “NINJA loans” were—past tense—loans that were extended to folks who met those dubious criteria. Really, the only thing lenders looked at in these cases was a person’s credit score. As one might imagine, loans like these are fraught with risk, which is why they were pretty much banned after the 2008 subprime mortgage crisis.
Think about it: if we don’t have to list our income or assets or anything to get a loan, then what can the bank do if we default on our payments? We didn’t list any collateral they could seize. And on the borrower side, even though we’ve got to have a super-high credit score to qualify for a NINJA loan, that doesn’t mean we’ve got the funds to pay it back. Plus, NINJA borrowers typically ended up paying much higher interest rates than borrowers with other types of loans. So even though we’re still pretty stoked about our sweet ninja gear, especially the part where we get to throw knives, it looks like we missed the boat on securing ourselves a NINJA loan.
