Lotteries are usually associated with big winnings and very low odds of winning, but what would you say about a lottery that can win all of your debt ?
This is exactly the idea that came up in a US state when they proposed a lottery in which student loan holders could participate and the winners would be discharged.
This is not a case of millions of winnings
As with big lotteries, but usually, the amount of credit is between 20 and 50 thousand Euros, which in turn means that there may be many more winners than lotteries with only one main winner .
On the one hand, this idea is not that bad, because the people who win the lottery will be free of credit and will not have to pay a certain amount each month to pay off the debt, and winning the lottery will not be able to withdraw that money in the creditor’s account they shall pay for that debt.
But on the other hand, the number of winners will still be small enough that most of the people who participate in it will still have to think about other ways to pay off those big credits, as well as tax winnings, as in all world lotteries.
Of course, this idea sounds pretty bad on its own, and if you tweak it a little bit, it might be possible to create something interesting and really useful.
For example, not that people would have to buy lottery tickets themselves, but that the bank would draw one person each month to get his credit back, on some condition, that his credit card purchase must be a certain amount or he should definitely to a long-term customer of that credit institution.
The better idea is not to put up an auction to win that money
To put all the money that every person would spend on a ticket to put in a bank so that it can accrue interest, like deposits. And then this accrued interest would be raffled and someone would get enough money to pay off their loans.
And so would those people who wouldn’t be in trouble because their money would still be in this special savings account, but every month that money was there, they would be able to get a payout that would pay off their debt.
But if that happiness does not come, this money can still be used to try to repay your loan faster, and while it may not be so large that you can pay off that debt in one installment, it will still ease your monthly payments and they will gradually become much smaller.
Such an idea is not at all profitable
Both to make people save money and to create that sense of lottery, and yet people also have the opportunity to get this accrued interest as a win to pay off their credit.
But here’s where you should think about how to make sure that those who have more money in their account have a better chance of winning, because that would give them an extra reason to raise money and thus improve their financial situation.