Avoid loan apps, a word of advice.

[Queentoshi]

Over the week, a friend and I had a conversation about loans and loan apps and she shared a bitter experience of how she was unable to write a very important exam because the money meant for payment of fees to qualify for that exam was deducted by a certain loan app that she collected money from a while ago.  Who will you really blame? My friend for not paying up as at when due or the loan app for not notifying her before the deduction.
In all, I advice that we should try to avoid any business with loan apps as they seem to be very numerous these days and are easily accessible. Most importantly, You should know that you are at the danger of developing a habit of borrowing from them if you patronise loan apps even for the smallest amount.

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[edgycorner]

I think you are talking about payday loans?
They are parasites, absolute scums, lowest of the low, and will burn in hell(I hope there's one). They would give loans to anyone without accrediting the borrower and assessing the risk involved(I mean even the loans on this forum are accredited but not in real-world  ). This is what puts people in a debt trap.

I remember watching a video where the owner of some payday loan company, went to jail for years(rightly so) because his company kept on deducting money as interest. Can't find it now, maybe someone else can  
Edit: Found him, his name is Scott Tucker. Watch Dirty money on Netflix, it's a very informative docu-series.

[_act_]

Your friend's loan would have been on default before the loan company will be able to deduct the loan directly from his bank account. Why your friend did not pay in time? Your friend is to be blamed. Before he loaned money, there is ToS and how the loan will be. Do not loan the amount of money you are not able to get back at certain period you plan to back the loan.

[Hispo]

In general, it is not recommendable to adquire debt unless it is necessary.
I have seen some of those apps, specially I have seen Xiaomi's credit app called "Mi Credit", according what I have read it is popular in India (one's of Xiaomi's most important markets).

I am not familiarized with the interest of these apps and whether they are predatory or not, as a rule of thumb, credit is supposed to be a tool for emergency expenses but unfortunately I am aware that there are people in both developed and developing countries that put themselves in a position of increasing debt risking their credit scored and personal finances.

[jackg]

I think you are talking about payday loans?
They are parasites, absolute scums, lowest of the low, and will burn in hell(I hope there's one). They would give loans to anyone without accrediting the borrower and assessing the risk involved.

Yeah they have very scammy business models. The largest one in the UK went out of business when a court determined they couldn't charge more than 100% interest on loans afaik (wonga).


Most debt is addictive if you want something now and don't want to wait.

Lending should be taken out as a last resort and even then should be attempted to be taken from a bank (potentially over a longer term to keep repayments low).

[boyptc]

These loaning apps are terrible in customer service, they really are a business that will suck every customer's money that have taken loan from them.

If you're going to take a loan, just go with the banks and they've got lesser interest rates.

The twist from these apps are they've got lesser requirements so those that are in dire need, they're the best options but when they've got the loan, terrible experiences will be made from them.

[lovesmayfamilis]

I was always brought up by the rule of "live within your means." Nowadays, it is difficult to be sure that it will always be easy to pay interest rates. Therefore, it is better to limit yourself to something than to cause yourself a bunch of problems afterward.
In my country, it is very easy to get a loan. No documents with the provision of a person's employment are needed to provide a guarantor of return. Microcredits are especially developed. But when it comes time to repay, there is a completely different amount that the borrower does not expect to see, since some obligations are written in small print, and people most often do not pay attention to them.
Credit life is like a bird in a cage.

[The Sceptical Chymist]

Edit: Found him, his name is Scott Tucker. Watch Dirty money on Netflix, it's a very informative docu-series.

Awesome, I hadn't noticed that in the god-awful Netflix display page of their movies and TV series, and I appreciate you taking the time to mention it.  I just found it and am going to watch it, probably after this post.

I'm not familiar with loan apps, but based on what I know about hard money lenders, payday lenders, and the like I'm sure OP's friend got ripped off somehow.  Those services are basically the worst form of usury, and they really should be illegal in the US.  I'm not even sure how they're regulated, but even if they are they're profiting from desperate people and that leaves a bad taste in my mouth.  They're worse than drug dealers.

I was always brought up by the rule of "live within your means."

Everyone should do that, but you and I both know what the reality is.  I don't know about other countries, but in the states everyone has a credit card, and a lot of them are maxed out.  People buy homes that they're slaves to based on their mortgage rates and cars they have to finance, etc., etc.  The rule that I've stuck to for the last 20 years is if I can't buy it with cash, I don't buy it.  Saves me a lot of headaches.

[Poker Player]

In all, I advice that we should try to avoid any business with loan apps as they seem to be very numerous these days and are easily accessible. Most importantly, You should know that you are at the danger of developing a habit of borrowing from them if you patronise loan apps even for the smallest amount.

I remember seeing somewhere some time ago that the biggest business in the world is not drugs, nor arms, nor prostitution. It is debt, considered globally: mortgages, personal loans, credit cards and all kinds of credit.

The problem today is the ease with which impulsive people, of which there are many, can get a loan in a short time from their cell phones. This has made, for example, that people who lose everything they have in the casino can ask for a loan from their mobile, have the money in their account instantly or in a short time and continue betting, to lose everything most of the time. But then comes the hangover, you have to pay back what you lost, sometimes during years.

It is best to try to avoid debt, with some exceptions, such as a mortgage to buy a house.

[kaseygriffin]

In the area where I live, there are many forms of debt with many sophisticated solicitation techniques, not only through internet advertising, sms, calls, apps, ... but I also see it as a profession for some people. Young subjects used to broker with people who needed money. And perhaps not much to say when it is all bad money, taking advantage of ignorance to foreclose on borrowers with exponential costs. So, be more cautious when borrowing money anywhere, but it is best to avoid material constraints related to money, don't make things difficult for yourself and become poorer.

[so98nn]

I think they are talking about the apps like LazyPay, PayLater, Dhani etc apps which allows you to pay money instantly to any services or products and you can pay the money later to those services. This is nothing but taking the loan from then and paying back the money with stipulated timeline.

If you do not payback the amount then obviously as default you will be charged interest on the amount.

These services are high risk and can affect your CIBIL score directly.

So better your friend report it to banks with proper proofs or they may get affected with CIBIL.

[bittraffic]

Lots of these today online advertised everywhere on facebook like the FinanZero, PaySense or Buddy Loan. They're preying Moms needing cash for theirs kids. People with no options but to take a loan will really go to these loan apps since they need the money. Missing the date of pay, you get to pay an interest for it.

If your friend had already took a loan, he just have to pay it in full and not do it again,  these lenders are just going to suck more money from him.

[Eternad]

Over the week, a friend and I had a conversation about loans and loan apps and she shared a bitter experience of how she was unable to write a very important exam because the money meant for payment of fees to qualify for that exam was deducted by a certain loan app that she collected money from a while ago.  Who will you really blame? My friend for not paying up as at when due or the loan app for not notifying her before the deduction.
In all, I advice that we should try to avoid any business with loan apps as they seem to be very numerous these days and are easily accessible. Most importantly, You should know that you are at the danger of developing a habit of borrowing from them if you patronise loan apps even for the smallest amount.

The loan app has the right to deduct the payment automatically if it was due already because it was written in loan ToS. She shouldn’t use that same payment method to pay her school fees if she knew that she has unpaid due loans. A debt is a debt and debtor don’t care about the borrower situation because it’s personal while loan app is a business and not a charity. There’s no way for a loan app to notify the person who apply to loan before they will deduct payment.

[P2PECS]

The loan app has the right to deduct the payment automatically if it was due already because it was written in loan ToS. She shouldn’t use that same payment method to pay her school fees if she knew that she has unpaid due loans. A debt is a debt and debtor don’t care about the borrower situation because it’s personal while loan app is a business and not a charity. There’s no way for a loan app to notify the person who apply to loan before they will deduct payment.

Probably because I used the same account for the loan repayment and to pay the fees. If he had used different accounts, he would have been able to pay the fees, but he would not have been able to avoid paying, because the loan app would have initiated a seizure procedure, which takes a while.

[Davidvictorson]

I dislike loan apps. They are associated with everything a business model shouldn't stand on. It reminds me of the advert of a loan company, "Get 5million in 5 minutes on the xxxx loan app. No collateral. No Paperwork." Like how is this not a red flag? In my country one of the reasons that make loan apps to act like crazy is because there is no regulation of their operations. They are mostly fraudsters. They have a ridiculously have interest rate. Terrible customer service. They bully defaulters and even go as far as calling the family and friends of the borrower to assassinate their character.

[PX-Z]

Loans are normal if you really need it, take it as a last resort, for personal use, whether you use an app or not. Although making a loan for a purpose of a business is okay and somewhat recommended though.

What you need to avoid are making loans that you can't pay in the long run.

[uchegod-21]

Getting loan from loan apps or loan customers comes when two things happen.
1. When the need to get the money is absolutely necessary.
2. When you cannot get from trusted friends and relatives.

Some of these loan apps are not regulated and they do not have regards to privacy. They can assassinate character. Even when the borrower have settle the depth they will still go ahead to call or message anyone close to the victim, advertising him as a debtor.
If you want a loan, go to the bank and with collateral and get a loan.

[erep]

I dislike loan apps. They are associated with everything a business model shouldn't stand on. It reminds me of the advert of a loan company, "Get 5million in 5 minutes on the xxxx loan app. No collateral. No Paperwork." Like how is this not a red flag? In my country one of the reasons that make loan apps to act like crazy is because there is no regulation of their operations. They are mostly fraudsters. They have a ridiculously have interest rate. Terrible customer service. They bully defaulters and even go as far as calling the family and friends of the borrower to assassinate their character.

Many loan applications are from companies that are not registered with the government so that they determine independent regulatory decisions with the highest loan interest rates, billing regulations are not in accordance with procedures because they forcibly confiscate goods from borrowers and threaten the safety of borrowers if they are not repaid. I avoid application-based loans and choose bank loans if the conditions of economic need are urgent, bank loans follow official procedures from government regulations.

[davis196]

Over the week, a friend and I had a conversation about loans and loan apps and she shared a bitter experience of how she was unable to write a very important exam because the money meant for payment of fees to qualify for that exam was deducted by a certain loan app that she collected money from a while ago.  Who will you really blame? My friend for not paying up as at when due or the loan app for not notifying her before the deduction.
In all, I advice that we should try to avoid any business with loan apps as they seem to be very numerous these days and are easily accessible. Most importantly, You should know that you are at the danger of developing a habit of borrowing from them if you patronise loan apps even for the smallest amount.

Loan sharks exist for centuries. Modern day loan sharks moved into the digital world. That was pretty much expected.
I don't know who is to blame for your friend's situation. Maybe she's guilty for using such "loan app". When you are really desperate for money and someone gives you a loan without collateral there will be hidden fees and terms for sure. Those loan sharks are searching for poor people with no financial discipline. It's really easy to fall into a trap, if you don't know what you are doing. The people, who are desperate enough to borrow money from such companies have to read the fine print on the Terms of Service and the Privacy Policy.
Blaming the loan company for not sending a notification isn't serious. If you have to pay for a bank loan/mortgage would you miss the payment only because the bank didn't sent you a notification?

[TheNineClub]

Loans should be avoided at all costs. Only in extreme dire situations, but never for investing. First rulle of investment, put in only what you have to spare, what ever that is for a person. People who mortgage their hosuse or take out loans from individuals or even banks should not do so to invest. That's just gambling.