if a person pays back half of a 9000.00 loan and the other pays back half of a 11,000.00 loan. did the person that had borrowed 11,000.00 come out ahead?

Question

If a person pays back half of a 9000.00 loan and another person pays back half of an 11,000.00 loan, Is that fair to both borrowers or did one come out ahead?

Answer 1

The person that paid back half of his $11,000 loan now owes $5,500 less than before.  His net worth just improved by $5,500 (assuming he did not borrow or sell any equity to pay back half the loan).  

The person that paid back half of his $9,000 loan now owes $4,500 less than before.  His net worth just improved by $4,500 (assuming he did not borrow or sell any equity to pay back half the loan).  

Did one come out ahead?  If both borrowers paid their loans out of earnings and not buy selling equity the first borrower came out ahead because his net worth increased more.  If they both sold equities or borrowed additional money to repay loans, then neither borrowers came out ahead.  

 

 

Is it fair to both borrowers? Paying back loans in the US is usually a contractual obligation.  So yes it is fair to ask borrowers to pay back their loan obligations.