Is taking a loan/debt addicted ?

[Marcellin9]

Well, I have to clarify that personally I have never had any loan or debt in my life so this thread has nothing to do with my experience but intends to find out how people in loan/debt deal with the problem. Let's say you take loans from a bank and sometimes for whatever reason, you can not pay the debt on time, then you borrow money from other channels. Sure this works for a certain period but later bad things may happen, you have to postpone the payment and struggle with finances again. Isn't this a vicious circle ? How would you deal with the problem ? I am all ears.

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[davis196]

The solution would be to just negotiate with your bank and postpone the loan payments(if possible).
Cut your costs and try to grow your income. Just don't borrow money from "fast loan" companies. They are way worse than a bank loan.
In my country, even consumer loans are covered by a collateral or by somebody, who guarantees the loan for you.
AFAIK, Life insurance is also a must for applying for a loan(at least where I live).That way when something bad happens(the borrower dies or gets injured) the insurance company would pay a compensation fee, which can be used for covering the loan.
I prefer to stay away form credit card debt. I used mostly paper cash for spending. I have nothing against credit card debt in general, I just don't need it.
 

[Oshosondy]

If you borrow money from bank or on an online loaning company, you may likely be unable to borrow from any other bank or company again, they have a means they can know that you have a loan you have not paid before, because of that they will not borrow you. The best is to just make sure you pay the money you borrow, not to think of borrowing to pay borrowed money.

If you know you can not pay back the money you want to borrow, do not borrow it.

[Mauser]

Well, I have to clarify that personally I have never had any loan or debt in my life so this thread has nothing to do with my experience but intends to find out how people in loan/debt deal with the problem. Let's say you take loans from a bank and sometimes for whatever reason, you can not pay the debt on time, then you borrow money from other channels. Sure this works for a certain period but later bad things may happen, you have to postpone the payment and struggle with finances again. Isn't this a vicious circle ? How would you deal with the problem ? I am all ears.

That sounds terrible mate and we should never fall in that trap in the first place. All my life I tried to live within my own means and never take out any loans - which of course doesn't work. I needed a loan back in university to finish my studies and I needed another loan to help our families keep our house and renovate it. In both cases it was necessary to get the money from the bank and there was no real alternative. In my opinion it's best to look at a loan as a means of last resort that should never be used lightly. We shouldn't be borrowing money for leisure or other unnecessary expenses, because the risk of getting used to living a lifestyle above our means is too great. Before you take out a loan make sure that there is no alternative, maybe you can hold of your purchases for a few month and save the money first? In my country it's not really easy to get a loan, the bank asks for a lot of collateral and if they see that you already got money from another institution they will likely not accept any new loan. 

[rat03gopoh]

How would you deal with the problem ? I am all ears.

• Avoid the behavior of taking debt (again) to cover (other) debt as much as possible.
• Increase income, involve unemployed families.
• Rearrange lifestyle, spending (even ready to live in extreme conditions).
• Don't delay paying installments when it's time.

[Coin_trader]

Well, I have to clarify that personally I have never had any loan or debt in my life so this thread has nothing to do with my experience but intends to find out how people in loan/debt deal with the problem. Let's say you take loans from a bank and sometimes for whatever reason, you can not pay the debt on time, then you borrow money from other channels. Sure this works for a certain period but later bad things may happen, you have to postpone the payment and struggle with finances again. Isn't this a vicious circle ? How would you deal with the problem ? I am all ears.

First of all you should not take a loan if you didn’t have the capacity to pay it on time including all the interest. Second taking a loan just to pay the first loan will just make you pile up with more debt due to more interest rate. You should have a stable income from salary or business in able to manage this kind of connected loans.

I do this sometimes when I first apply for a business loan. I struggle to pay since my business is just new and can’t generate enough profit to pay the monthly dues and interest rate so I decided to get another loan to assist me on paying the monthly dues and interest until my business can generate enough profit to pay the loan itself without affecting its own budget for operational cost. I plan this loan including the emergency loan in case shit happened in my business since I have back up funds from my crypto.

Availing loan is very good to get capital without the need to spend yours if you are planning to have a business. But taking a loan for personal expenses alone is a very bad idea especially if you just use the money to purchase something luxury like car and house while your salary is not enough to pay for it.

[Poker Player]

Well, I have to clarify that personally I have never had any loan or debt in my life so this thread has nothing to do with my experience but intends to find out how people in loan/debt deal with the problem. Let's say you take loans from a bank and sometimes for whatever reason, you can not pay the debt on time, then you borrow money from other channels. Sure this works for a certain period but later bad things may happen, you have to postpone the payment and struggle with finances again. Isn't this a vicious circle ? How would you deal with the problem ? I am all ears.

Many people work this way, and not only people, look at the states that keep going deeper and deeper into debt, and in order not to go bankrupt they keep printing more and more. Even now that there is a small tightening, the debts do not stop growing.

In the end, the individual does not have a printer and ends up going bankrupt if he enters the circle you say. Or selling the few assets he has. A very typical case is that of someone who has a half-paid mortgage, but gets into a spiral of consumer debt and credit cards, and to get out of the hole what he does is to take a Home Equity Line of Credit.

I avoid debt like the plague, although I recognize that sometimes some debt is smart, and many companies do it but for most ordinary people it is usually a disaster.

[Solosanz]

Most likely people who taking a loan from banks and other regulated lending platform are mostly need to create or expand their business, they're not addicted with loan because they're not using it for increase their luxury life.

But people who taking a loan from friends which is usually a small amount money are mostly just for buy branded stuff for their luxury life, this type of people doesn't know how to manage money and using their money wisely.

[salad daging]

What I know is that banks already have a system where if you already have a loan and then want to borrow again from another bank, it can't even be blacklisted, which they cross out, except for borrowing through other channels with the meaning of friends or relatives, maybe you can borrow and cover it previous debt at the bank.

Usually people who borrow from the bank are only for the business they are running, but this is not an addiction, it's just that they want to develop a business from a lack of funds, so I think it's only natural to borrow from a bank with reasonable reasons.

Maybe with this problem you should be able to pay off the loan beforehand because if you borrow again from another it will be complicated and cause problems.

[Bananington]

Well, I have to clarify that personally I have never had any loan or debt in my life so this thread has nothing to do with my experience but intends to find out how people in loan/debt deal with the problem. Let's say you take loans from a bank and sometimes for whatever reason, you can not pay the debt on time, then you borrow money from other channels. Sure this works for a certain period but later bad things may happen, you have to postpone the payment and struggle with finances again. Isn't this a vicious circle ? How would you deal with the problem ? I am all ears.

This is just taking from Peter to pay Paul, and it is bad Practice. For loans, Only take or borrow money that you are certain you can pay back, If not at once but in not more than three installments. Taking money from a bank or someone with the hope to be able to raise the money, that is , you have no means to repay but relying on just hope to be able to get the money before the agreed time for repayment is a highly Irresponsible behavior. Avoid getting used to taking loans as a way to raise money, that habit can be bad for your financial life.

[autumnleaf]

People take out loans for a variety of reasons, including starting a business, paying for schooling, or personal reasons. Even wealthy people take out loans; it is a common practice in society. What is problematic is when sluggish people repeatedly borrow money without having a plan for how to pay it back, becoming dependent on it.

[livingfree]

Well, I have to clarify that personally I have never had any loan or debt in my life so this thread has nothing to do with my experience but intends to find out how people in loan/debt deal with the problem. Let's say you take loans from a bank and sometimes for whatever reason, you can not pay the debt on time, then you borrow money from other channels. Sure this works for a certain period but later bad things may happen, you have to postpone the payment and struggle with finances again. Isn't this a vicious circle ? How would you deal with the problem ? I am all ears.

That's an obvious unending cycle, paying a debt with another debt is a no-no. I've seen relatives of mine and friends that had hard time getting out of that cycle.

If you're going to take a loan, make sure that you'll be paying it from your means/source or salary. Because if you'll going to get it from another loan outlet then you're just sinking yourself to a problem that's hard to deal with.

Yeah, there's probably the majority of us that has loans, be it from the banks or from personal loans to the people we know. But don't do that if you want to get out of debt and be debt free.

[o48o]

Well, I have to clarify that personally I have never had any loan or debt in my life so this thread has nothing to do with my experience but intends to find out how people in loan/debt deal with the problem. Let's say you take loans from a bank and sometimes for whatever reason, you can not pay the debt on time, then you borrow money from other channels. Sure this works for a certain period but later bad things may happen, you have to postpone the payment and struggle with finances again. Isn't this a vicious circle ? How would you deal with the problem ? I am all ears.

Addictive? It can be but then you are using it wrong. You shouldn't take a loan unless you absolutely need it. If you have a steady job, you can buy something like a house, or a car to get to a job if you need one. You shouldn't buy things you don't absolutely need. Because at any time your financial situation could change. And not getting behind on your bills from a luxury thing you thought needed will make you regret your life decisions.

And even if you think that you got everything under control. Your investments are doing fine and you got a job. Those can be gone in a week. Pandemic taking your job, nearby war crashing your finances and making the price of everything more then 2x in a month. There could be a bank run. And last thing right then is need to pay up those bills of the things you can't even afford using anymore.

Having a credit card creates a great buffer that works as safety if something happens that you haven't budgeted, but you can soon forget it's for your safety only and can easily use it as bonus money. Then you really are in trouble.

[iv4n]

Isn't this a vicious circle ? How would you deal with the problem ? I am all ears.

I think people get addicted to other stuff that money can buy... taking a loan is just the easiest way to get more money at once, for any sort of reason. It's a vicious circle if you are getting into one loan after another, especially if you are using those loans for fun (which includes gambling, drugs, expensive lifestyle, and other vices...).
So how to deal with it... simply by cutting down your expenses, quitting some expensive "hobbies" and moving to a moderate lifestyle. Focusing on work and finding additional sources of income, for sure it would be better to work harder than to have free time and space to think about "your vices".

I took many loans, but always when I needed more cash at the moment for some big things (sort of speaking). I wouldn't be able to get a lot of things done around the house without loans, short and long-term ones, depending on the amount...

[Z390]

There are loan sharks that ruined your reputation once you take a loan and refused to pay back in time, this means you will not be able to take loan from other loan sharks or banks again, if you really want the truth I will advise you to stay away from loans.

You said it yourself that if something bad happens, this is why it's bad to take a loan to invest in anything, rich people take loan because they have other properties they can drop if anything goes wrong, for those who are still struggling it's a bad idea.

Where I am from you can't change the date even if the worst happened, you have to pay what you own, if not you will not like yourself.

[The Sceptical Chymist]

Are you kidding?  Tons of people fall into that debt spiral you described, OP.  That's been the case for many years, and I'd be willing to bet it's been much worse in the past decade when interest rates were at or near 0%.  Many people (at least in the US) live well beyond their means and use credit cards with high interest rates to buy shit like smartphones, TVs, and all sorts of luxury goods--not the types of things you should only buy if you have enough cash to do so.

Just don't borrow money from "fast loan" companies. They are way worse than a bank loan.

So true.  They're all over the place where I live, and they're as bad or worse than pawn brokers.  Usury at its worst--and frankly, a lot of credit card companies charge interest rates nearly as high as those places.

[Nwada001]

Before you decide to take a specific amount of loan, you should definitely have a backup plan that you intend to use to repay the loan before it becomes due, which could be your salary, your payment from your next job, or whatever the case may be. If you are unable to receive the funds needed to repay your loan on time, you should return to the bank or whoever you are dealing with and request an extension.

Taking a loan to pay off an existing one, which I must say is a stupid decision in some cases unless the other party wants a repayment, which is always necessary, is the best decision I will make. If I can't get my hands on family and friends who can help without interest, it is better that way than to get yourself into so much debt tomorrow, which can destabilize one's financial growth.
 
 

[blockman]

Just don't borrow money from "fast loan" companies. They are way worse than a bank loan.

I'll agree on this one. I've got friends that had applied for a loan, well, the loans were just small amounts but still they're loans. And these companies are truly wild when they were late in payments. I know that they have to be responsible and follow the contract that they've agreed upon that they've signed that they should pay with penalty for late payments.
But those loan companies through mobile apps in my country as I've said, they're wild in a manner that they're giving threat to the people that they've included as their reference just in case they don't pay. Crazy companies and that's another reason one shouldn't borrow from them.

[slapper]

Taking out loans or incurring debt may definitely have a double-edged effect; although it might help us reach our financial objectives, improper management can cause it to turn into a debt trap. When unable to pay back a loan on time, borrowing money from other sources may provide some respite, but in the long run, it just increases the financial load.

Prioritizing debt repayment and developing a budget plan to efficiently manage spending are smart ways to handle this problem. Planning the loan repayments in accordance with the terms and circumstances of the loan agreement is essential. It's crucial to let the lender know about any troubles you're having paying back the loan; they could offer you some other solutions.

Finding methods to raise income, such as by taking on a part-time work, selling unnecessary possessions, or reducing spending, is an additional option. A financial adviser may provide advice on the best course of action and assist in developing a strategy for repaying debt.

Furthermore, it's critical to take charge and refrain from taking on new debt until the existing obligation is repaid. One might concentrate on creating an emergency reserve for unforeseen costs and strive towards financial security rather than depending on loans.

[xSkylarx]

Just a little background I worked in a local government before, and most of the regular employees there are in this situation. They tend to have a loan that is deducted directly from their pay, and they also have another loan from another cooperative, for which they usually borrow money from a friend just to pay their loan. There is no way around this until your loan has been paid; you'll end up digging deeper until all the loans are paid, unless they have extra incomes from their partners or on their own. Also, I have taken a loan before, and I would say it is not addictive, but most of my colleagues will say to take a loan again, as their reason is that you can't buy those things in cash, and it is very boring if you don't have a loan to pay.