The Trap of taking loans, from loan apps the mistake most young people do.

[Fortify]

As technology and access to the Internet has revolutionized the world. Allot of things has become easier to have access to when compared to some years back. One thing that is now common these days is easy access to loans via online loan apps which provides Monterey servers to people, infact having access to a loan now especially in my country is less than an hour.

Due to this easy access to money due to these loans apps, people have been locked up in a dept circle. This is because most of these loans apps are structured in a way that is disadvantageous to the borrower. This is so because these loan apps have a high interest rate which they add to these loans, plus a short period of payment. With this when ever someone fails to pay back their loan in the due date, extra charges applies which increases the the amount of money money becomes a financial burden on the long run.

With this if the borrower doesn't have money to pay, one is forced again to collect loan from another loan apps to offset the previous one, this circle repeats and become a financial prison that has lock up many. One thing that I have seen with these loans apps is their easy access to loan, unlike the conventional banking systems which requires a collateral when ever they are giving out loans. These loans apps doesn't require collateral what is needed is just the one number of two to three persons which they can call when the person defaults to pay.

This has made many young people to see loans apps as an easy way of getting money, not realizing that they are actually trapping their financial freedom and progress. I want to summarize by saying that taking loans is not the remedy to our financial problems, but good financial habits such as saving and investing is the key to financial prosperity and borrow when it is only necessary or emergency situation.

You talk about this as if it's a new thing, but online payday loans were around 20 years ago and before that your average loan shark on the street had ways of finding new victims at extortionate rates. It may be easier than ever before to take these kind of loans, but these companies are usually quite heavily regulated in most countries and the worst excesses have been limited by law - but I guess it depends which country you live in. It's actually hard to put pressure on people if you have the distance of the internet, rather than the physical threats of violence that might have accompanied such borrowing in the past, which makes lenders a bit more risk adverse as well. Things have actually improved since reaching this point.

[Cryptoprincess101]

Loan is not bad but just make sure you use the money for something that will bring more value to you, that is if you are taking large loans. I have heard of many billionaires from my country that borrowed loan from the bank and they used it for their businesses and became successful. The problem now is just that loan is too accessible for everyone now, both those who can afford a repayment since they have a job and those who can't repay because they don't have a job. I know that the state of the economy has made a lot of people not to be able to manage their earnings effectively as they need some extra funds to meet up some of their needs but they should take loans with caution and not put themselves into unnecessary pressure just because they are owing loan.
    Life is not easy for most people, especially is developing countries and lack of employment has also led many people to take bad risks while hoping that things will work the way they expected but, in the end, they still enter into troubles of borrowing loans and couldn't make repayments. Loan apps also need to be regulated, i think because they are not regulated that is why there are many of them borrowing loans to people without even checking if they can repay back.

[o48o]

Depends. For example if you are using Klarna, you get 30 day loan without interest. You only pay interest if you aren't able to pay it back in 30 days and moving the date.

With that, it makes sense to take a loan if you find something with a discount that you currently couldn't afford to buy, but it's something that saves you money in the long run.

And for sure, just like with a credit card, some people are less equipped to handle it, and sometimes situations change and you can't stick to the payment plan. But in overall, with a good budgeting, that can actually save ton of money.

[EarnOnVictor]

I blame the government and commercial banks for this. Commercial banks; because they don't make the loans more accessible to the masses despite having enough of it. They are too cautious, which could be reasonable, but they are overdoing it, thereby concentrating on the wealthy and those who can provide the undeniable evidence that they are gainfully employed with trusted organizations.

Government; because they always act like dummies. Fine, loan apps should be allowed into the country, but to protect their citizens, they should be well-regulated and monitored, so that there are prevailing caps in the upper and lower rates that can be offered to the citizens. Lack of this is causing excessiveness and cheating; using the desperation and vulnerability of the people to achieve that.

[CryptopreneurBrainboss]

This has made many young people to see loans apps as an easy way of getting money, not realizing that they are actually trapping their financial freedom and progress. I want to summarize by saying that taking loans is not the remedy to our financial problems, but good financial habits such as saving and investing is the key to financial prosperity and borrow when it is only necessary or emergency situation.

Finance aren't taught in schools these days and that is the beginning of our problem as this generation are getting their self into debts that will hunt them for life. There is a mindset that you begin to develop when you start depending on loans for your survival, the poor don't understand what loans are supposed to be used for and that is why they think they are wise when they borrow to spend on things that does not generate back money for them.

But the rich understands loan and only borrow to invest in things that will generate money for them to pay back that loan and then own the asset/property that generates money for them for life. That is how loan is supposed to be used but we abuse it everyday and the loan companies notice, that's why they are making it very easy for young people to assess loans.

It isn't about investing itself but just know how to manage the small you have first and with good management you will able to live within your means instead of being indebted and working for others.

[Cookdata]

Where I live, I don't think that loan apps are as common as in other countries. People simply go to their banks and ask for a loan, or they take one of these loans offered on TV who hardly ask for explanations, but whose conditions are much worse. But I am aware that in other places such loans are very popular, especially by those who can least afford it, even though they are a trap.

I'm not sure if banks gives loans to any account. Before you are going to be given a loan, your account type must be a savings account which of course the bank knows what's coming and going to the bank within a month and the loan you are getting is going to be within the range half the value of your monthly income transaction so you don't default. Some increase the amount with time as take the loan and repay on time, that's how banks gives loan.

I don't encourage anyone to take loan, it's stressful and more like a load on you when you don't have other source of income to pay up on time. The only exemption I have is health emergencies, some of us battle with health conditions that are unfair, sometimes you don't even plan for them. Some people don't resort to asking people for borrowing, they do that to keep them away from asking questions what the are going to use the funds for, if you have means to pay back just get it for treatment, otherwise try and ask your family, loan is a financial burden.

[ZAINmalik75]

Do you really think that giving advice to people taking loans without a proper repayment plan would do any good? It won't, because they don't listen or think before they do something, all they see is the immediate future which is that they are going to get some funds in their hands that they can use for whatever they want, they don't think about the possible consequences of their actions, whether they can repay the loan, how much interest they are being charged, or what will happen if they don't repay those loans, etc.

Someone who is wise enough would understand that taking loans when you know you can't easily repay them is a bad habit, and they wouldn't go for it. Loans are only good for people who are working and know they are going to get an income at the end of the month and then they can repay the loan they have taken when they needed funds, and even then, it is important for the borrower to make sure that they are borrowing from someone who is not going to charge them so much interest on top because if you can't repay it all, then you will still be in trouble.

[Shinpako09]

Actually, taking out a loan isn't that bad as long as you use the money wisely, such as for emergencies or investments. The problem is that some people take out loans just to buy things they want, which I think is a very bad financial decision.

For example, I saw a report on our local news about someone who ended up drowning in debt after taking loans from multiple loan apps. Since it's so easy to apply and get approved, he kept borrowing from one app after another. The worst part was that he only used the money to buy things from online shops.

[savetheFORUM]

I was wondering which country you’re from, since things usually work a little differently in industrialized countries, and I see you are from Nigeria. In countries with high GDP you could only do that, if at all, with very small loans because, generally speaking, all your loans—if they exceed a certain amount—can be tracked by a central agency. So taking out more and more loans to pay off the previous ones doesn’t usually work. They become unavailable very quickly once you get into debt and can’t make the payments.

That's the actual problem: these loan apps are mostly run and controlled by private parties, which means that there are no central authorities involved which could keep track of how much money the borrowers are getting, and then make sure that they can't borrow from another similar app, which is why this causes most of the issues for those who are too dumb to understand that they shouldn't get themselves into all this. What they do is take a loan from one app, which is controlled by private party A, and when they have to repay the loan, they take another loan from another similar app controlled by private party B, now the private party B has no clue about the loan history of the person, they only care about their own business and the interests they are going to charge.

If there are/were central authorities or government authorities involved, they could save people from these problems, but I wouldn't blame anyone but those who are taking such loans. A person should be smart enough to know what is good and what is bad for them. If you are unemployed and having financial problems, taking loans is not what you should be doing to take care of your expenses, but you should start looking for a source of income to support yourself and earn a living. Bad debts can ruin the lives of people, but some people are too ignorant to understand this.

[bhadz]

Another big issue in my country. Aside from the addiction that comes from online gambling, it's also the same with online lending apps. When you can't afford it, don't take a loan for it. That's the reminder which is easy to remember, but people think differently nowadays, they think that they're already high class just to take a loan to take that upgraded phone that they don't need. And when the time of payment collection comes, they default. And that's why these lending apps resort to blackmailing the borrowers and the reference people they have signed up for that loan. While both sides are wrong IMHO, payment should be made on time and without even asking for it because the loan was taken and granted easily. As for the collectors, they shouldn't use foul words for it like threatening the borrower and even bothers his personal references.

[macson]

This is a new problem for many people today --- they assume that loan apps are a quick solution to their needs. They don't consider their ability to repay the loan and the crippling interest rates. What happens is that many of them are trapped with mounting debt and unreasonable fines.

This problem often even extends to their families, where even those who are unaware of the debt are terrorized by debt collectors because of their debt. This is quite frustrating, as I once experienced being contacted by debt collectors for a friend's debt.

So, I just want to say that, even if you want to take out a loan, you need to consider your repayment capacity. If it's not necessary, don't take out a loan through an app. Although it's easy, it will only trap you.

[Darker45]

~snip~

While these loan apps have helped some individuals to survive from their current emergencies through instant release despite of high interests, however the  convenience it offers were mostly misinterpreted by young individuals and just take loans even without reliable sources of income, or worst is, they take loans without no plans to repay what they've loaned.

However, I'm not trying to look as a pro-loan apps, but my point is, at least these people who are eager to take loans should also be responsible enough and take accountability of their actions and decisions. Whatever their reason is, loans are needed to be paid, on or before due dates. If they can't be sure if they can pay their loans, then they should have avoided taking loans in the first place.

If it's emergencies, taking loans isn't bad, although ideally everybody should have emergency funds so as not to be forced to take loans once the emergency arrives.

The problem is when loans are taken for the sake of unnecessary wants. As a matter of fact, even worse, many are taking loans without knowing how to use the money. This may be surprising but actually quite common. Once a loan is offered, many would just take it right away. How they'd spend it would be dealt with later.

And, yeah, as to how to pay the loan once the due date arrives, the mentality of many is "we'll cross that bridge when we get to it".

[Makus]

The loan app pandemic has been an issue recently and a lot of people are still falling into this trap unknowing to themselves. I came across a post of people that were being accused of kidnapping and this was posted on Facebook which is a social platform that a lot of people would definitely see. Loan apps take the pictures of people and then post them not to call them out but to blackmail and falsely accuse them of crimes that they didn't commit. Both young and old should avoid loan apps.

[Su-asa]

Inspite of the warnings that Is been spread online about loan apps a lot of young people are still collecting loans. The main problem is that the loans that they take from these apps increase to extremely ridiculous amounts that they don't even expect it to. Loan apps are indeed traps and a lot of young people are falling into it. Another down side of taking loans is that if you can't pay back it would be recorded in your credit score which can affect you when you are applying for a visa or applying for anything that's important.

[Umulala-alala]

I believe that before this loan App gives you a good amount of money they must have gain truth in you, initial they will loan you a small sum of money when they see that you have paid they increase your loan amount while there are also some of the app that wont borrow you any funds. Thses loan app has really help out most persons in time of an emergency situation just that some of them has high interest rate and also an increase in loan amount when the due date expired.

[Rockstarguy]

This has made many young people to see loans apps as an easy way of getting money, not realizing that they are actually trapping their financial freedom and progress.

Even before loan apps became well known, most banks offer loans to their customers, and it is programmed in a way that banks know how to get back their money from customers. As for loan apps, the reason why people are borrowing money from these apps is not just because they are very accessible, but because when a loan is taken from these loan apps, customers are unbothered about it when they are unable to repay the loan because most loan apps are not strict with customers in getting back their money, even when customers abandon the app. Loan takers know that if they take a loan from a bank and choose to abandon the bank without paying, the bank can still pursue them, even if they open another bank account. People prefer loan apps because they can choose to repay whenever they want.

[Dr.Bitcoin_Strange]

These loans apps doesn't require collateral what is needed is just the one number of two to three persons which they can call when the person defaults to pay.

These loan app is more rampant in countries with some weak laws and that gives those loan app the leverage to misbehave and that also helps most of their customers (borrowers) to also misbehave. In some countries with strict laws regulating every financial lending company, you won't see the online loan companies rampant but in my country, they are rampant and it's because of poor regulations, those company really taking advantage of some people that doesn't actually read terms and conditions before proceeding to take loans from them.

Since they are many, each of them have their different policies, some will not ask you to submit just three contacts of your friends&family, they will demand access to your phone contact and if you don't allow it, you can not proceed but when you allow it, they will save all your contacts to their data base and when ever you default the loan, they will start calling all your contacts and harassing them. Secondly, sime od those company will also ask you to submit your bank verification number, your residential address and your national identity card and your photos, with all these informations, they could even come to your house to harass you. Some persons were victims of such harassmemt in my area and I think the name of the company that did that was palmpay.

For people that are living in countries where these poorly regulated companies are operating, always be careful if you want to use their services, I personally don't trust them because of what I have seen them do to other people. Lastly, your information is not 50% safe with them, if you take a loan from one company and pay back on time, in a week time, more than 10 more companies will be calling you to come and take loan from them, the question is, how did they get your number?

[YOSHIE]

The Trap of taking loans, from loan apps the mistake most young people do.

Wow, whether by coincidence or fate, I immediately saw this topic.

The loan application phenomenon has become top lately in my area, especially those involved and problematic young people involved in local online gambling and economic factors.
Yesterday I saw a commotion among one of the neighbors, where he was visited by an online loan application collector, story after story, My neighbor's child used his parents' identity to borrow money on an online application, in short the money was never closed again, finally the online borrower went to the child's parents' house.

In fact, the young man's parents never knew that their son was involved in online gambling, he himself couldn't believe what was happening and what his son was doing, after finding out the real problem, the child's parents finally paid all the loans, Unfortunately, their child hasn't come home until now, whether he was afraid of being punished by his parents or the child really left home because he was embarrassed.

In essence, with the economy at a time like this it is difficult, at least it doesn't make it difficult for parents by taking out loans on online applications, however, to overcome the economic crisis in life there is a solution and a way out, instead of having to make it miserable for parents.

[Akaenyi]

Loans are supposed to be taken to finance projects that will generate money from where the loan can be repaid and the business or asset will continue to generate more profit for the loan borrower. It is unfortunate that these loan apps are capitalizing on people's ignorance about the purpose of taking loans to entice them to take loan for things that are not pop profitable to them, if they are not able to repay the loan they will become trapped with cumulative interest on their loan capital.

These loan apps have eliminated the tedious process of securing a loan and that is why somebody will feel like partying and they will take a loan to buy a new shoes, not minding that they already have a shoe. By the time they replace the loan they wouldn't meet up their basic needs and would be forced to take another loan whereby entrapping themselves in dept. I have never taken loan from a loan app because I know better that it is a trap, if I must take a loan it has to be for something very valuable.

[tottong]

This has made many young people to see loans apps as an easy way of getting money, not realizing that they are actually trapping their financial freedom and progress. I want to summarize by saying that taking loans is not the remedy to our financial problems, but good financial habits such as saving and investing is the key to financial prosperity and borrow when it is only necessary or emergency situation.

In recent years, this has become increasingly common, with many young people taking out loans through these apps for unnecessary needs.
One friend of mine took out a loan through one of these apps and claims to have never repaid it, despite the app constantly contacting them. I don't know how they managed to get away with it, but most loans based on apps that don't have physical branches like banks never repay their loans, as reported by several of my friends.

Taking out unproductive loans won't help change a person's life unless they're taking out loans to grow a business, and perhaps this type of borrowing is understandable.
Unfortunately, young people today are taking out loans solely to meet their lifestyle needs, putting themselves in serious trouble instead of seeking opportunities for financial freedom.