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

[The Founding Titan]

~

These loan apps most definitely don't force anyone to take loans from them and how ever high their interest rate might seem if they were licensed to operate then they are most likely doing so within the regulations of the country they are operating in so when you say that their interest rates are high they can't really be that much higher than from Banks unless they are illegal and I doubt that's the case here, so anyone who takes a loan from them probably has a reason for doing so, if it was done just because the person taking the loan wanted money to spend on irrelevances then you still can't blame the loan apps for making access to loan easy, they are providing a good service that alot of people need, it's not their fault that a bunch of fools are misusing that service.

[Youngrebel]

I don't even see this as a mistake people make anymore because a lot of young people know what they are getting themselves into when they take loans from these apps but they just do it because they think it is something they can get away with. There are dangers of taking loans without paying back and even if the loan apps don't text you or call you they would allow the interest to keep adding up for as long as five years or even more than that so they can take a huge amount from you. In recent times this has become a serious issue and more people are falling into this trap.

[Miles2006]

Anyone involve in taking loan should be ready for all this, I mean their consequences attach to taking loan mostly when financial success is not guarantee at the end. Loan apps are numerous recently, these apps now find a way to cover the ads system like 50% of ads online is all about loan though this is common business strategy besides I’m not blaming any creator for advertising their business online. Loan apps are not 100% reliable, the bank also is not advisable due to my personal experience I guess most people don’t know how frustrating banks can be when it comes to loan not minding collateral demand, young people should avoid taking loan when they’re not ready to pay or meet up the loan standard.

[Yeesha]

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.

From my perspective, the loan apps are actually making the upcoming generations lazy, the youths now focus on where they will be given loan without considering the outcome of the situation. In my society many young youths are engaged in those act. Is like they fail to understand the effects of what they are doing, or maybe they're just ignoring it. These can easily destroy their lives, because they are putting their BVN at risk. I think one of the major causes of these problems is lack of job opportunity. Since job opportunities are limited, the youths are turning into scammers, cheating the illiterate. Banks are offering the loans for them to benefit from it, but with the way the youths are handling the situation irresponsibly, the banks will not only lose the profits (interest), but they will definitely lose their capital too. They usually spend the money on unnecessary things, without making use of it productively.

[Versatile_choice]

Anyone involve in taking loan should be ready for all this, I mean their consequences attach to taking loan mostly when financial success is not guarantee at the end. Loan apps are numerous recently, these apps now find a way to cover the ads system like 50% of ads online is all about loan though this is common business strategy besides I’m not blaming any creator for advertising their business online. Loan apps are not 100% reliable, the bank also is not advisable due to my personal experience I guess most people don’t know how frustrating banks can be when it comes to loan not minding collateral demand, young people should avoid taking loan when they’re not ready to pay or meet up the loan standard.

This advice of not taking out loan also goes to adult not just young people, they are the ones that need this advice the most. Because many of them have come to the stage where they can't struggle to pay back the loan they took especially those that does not have a job, it surprises me when I see people taking out loan when they don't have a source of paying back the loan. Some believe that when they go for side hustle, they will Surely hustle out money to pay back forgetting that side hustle doesn't pay all the time. Sometimes they may go and come back empty handed. It is only advised to take out loan when there is a reliable source of paying back.

[JoyceBTC]

Sometimes, a need to take a loan may arise but people should learn not to form a habit of always borrowing money especially from unknown loan apps because most of these loan apps are very dubious. Some loan apps will ask you to grant them permission to have access to your contacts, gallery and even your location which can be very risky because criminals can even track your location and steal the money you borrowed by forcefully asking you to transfer the money to a criminal account number.

The truth is that when they borrow once, they will always want to go back when the need arises again and then it becomes a normal routine. When they fail to repay their loan on one particular loan app, they go ahead to borrow from another to repay their present loan while piling up another loan again.
Most people can’t really manage their finances and manage themselves, some borrow because they over spend and go out of budget, not necessarily because of a sudden emergency, so the next option is just to borrow.

[9ja Amaka]

Loan is definitely part of human, but these loan apps have really high interest rate with a very short duration to pay back, so its really not a good idea to get loan from them. I really don't blame these loan apps, because they set these apps to make profit, so it's left for you to borrow from them or not.  It is also very bad that if you don't pay back at the due date, they will keep adding interest which makes it very difficult for the borrower to pay back. I really don't know how these loan apps make profit, because a lot of people don't even bother paying back once they realize that the interest is too much for them to pay. The loan app idea would have been a very good one, just incase of emergency and you need cash, but the interest is way too high, so I will suggest that the government look into it and try to make them reduce the interest rate.

[Mame89]

~

These loan apps most definitely don't force anyone to take loans from them and how ever high their interest rate might seem if they were licensed to operate then they are most likely doing so within the regulations of the country they are operating in so when you say that their interest rates are high they can't really be that much higher than from Banks unless they are illegal and I doubt that's the case here, so anyone who takes a loan from them probably has a reason for doing so, if it was done just because the person taking the loan wanted money to spend on irrelevances then you still can't blame the loan apps for making access to loan easy, they are providing a good service that alot of people need, it's not their fault that a bunch of fools are misusing that service.

What you say is correct. No one on the loan app is forcing anyone to take out a loan, as the responsibility ultimately rests with you, even before you agree, and we've already read the interest terms and conditions. In this case, they're not wrong, but it's a trap because most loan apps make it easy for borrowers to apply, requiring only an ID card and a selfie. This often leads to temptation, especially for those with low financial literacy. This is why many young people fall prey to online loan apps.

In my country, many young people are trapped by online loan apps both legal and illegal. On the one hand, loan apps are innocent they intentionally create easy to access, even easier to use than bank loans. This is what traps young people even making them addicted to borrowing. Essentially, loan apps are useful for emergencies, but they can be dangerous if used for unnecessary expenses. So, in conclusion everyone should have financial education and learn self-control.

[leonair]

If you cannot take a loan from a bank or any trusted organization, then it is never right to take a loan from a third party loan app. Many types of loan app advertisements are seen on social media and it is explained there that how easy it is to take a loan now, but if you download those third party apps, they will take access to all the cookies of your device, gallery access and when the loan is applied, they actually analyze all the personal data of that user and see how much weakness that user has and give the loan accordingly. And they demand very high interest and I have seen a report that some apps give loans and then along with very high interest, they start doing various types of blackmailing if they get any secret personal data of that user.

If someone has the right documents, he can easily take a loan from a bank or any finance company and their interest is not too high, so why should one take a loan from a third party unauthorized loan app? There should be no financial transactions with any company other than those institutions approved by the government.

[Dogedegen]

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 is not true, personal loans do not require any kind of collateral in any country that has a reasonably developed world. In some countries you can get approved up to 50 000 USD or similar currency instantly if your bank has a good record and directly receives the salary, so they are familiar with your financial situations well. It is exactly like in those apps, just with the bank. You tap a few times in the bank app and you are most likely going to get instantly approved because the app has algorithms to check if you are eligible and only then offers it to you. This is the reason why the interest on this kind of loan is significantly higher than with others, there are no requirements. Don't blame the apps for providing the same service, you should put responsibility with the loan taker and never with the loan provider. Even loan sharks are not the bad people in any equation, nobody is forcing anybody to take a loan at the terms that are given.

Other types of loans like for a house may require some down payment, but that is still not really collateral.

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.

The responsibility always lies with the one who is making the decision. Overall it is advisable to avoid getting into any kind of situation where this kind of loan must be taken, but you see many people will do it for something that is not so smart like buying a new phone or adding more money for their car purchase.

The truth is that when they borrow once, they will always want to go back when the need arises again and then it becomes a normal routine. When they fail to repay their loan on one particular loan app, they go ahead to borrow from another to repay their present loan while piling up another loan again.
Most people can’t really manage their finances and manage themselves, some borrow because they over spend and go out of budget, not necessarily because of a sudden emergency, so the next option is just to borrow.

That is not necessarily true for everyone, I agree that it is true for most people. There are cases where well disciplined people will find themselves in unexpected trouble, and when judging all of their available solutions will decide to grab a fast loan for a limited purpose. But this is a calculated move that is done because of a specific need, with a clear goal and plan of repayment. Most people who do it do it on a whim or because they have done their finances in recent months wrong, like getting another lunch that they shouldn't have or buying something that they shouldn't have that put their budget into negative.

[SOKO-DEKE]

Taking loans is not a bad idea, to some people it can serve as a leverage to improve their business but it becomes bad when someone has no means of paying back, and that’s when you see them going in circles of debt like you said.

If someone has a way to pay back a loan, I will say taking a loan is not bad. But if someone doesn't have a way to pay it back, I will definitely say that taking a loan is bad because it can easily destroy someone life. This is because such a person will continue taking new loans to cover the previous ones. If he or she is no longer able to take another loan,it may end up with the loan remaining unpaid and i would consider such a person a scammer because, from the beginning, if they knew they couldn't pay back the loan, they should not have taken it in the first place.

Well some loan apps are too complicated to deal with, like why charge huge interest rate with short payment period? That's so unfair and people should avoid those kind of platforms, some even include hidden charges, very unfair. Also, people should be wise when dealing with stuffs like that, one should take unnecessary loans to sponsor their lifestyles.

Yes, it is true that the way some loan apps charge interest is too high. However, the fact is that everyone has the is running it  business, and every business aims to make a profit. Some loan apps that seem to charge very high interest may have their reasons for doing so. For example, the interest they charge may be based on calculations that some borrowers will not repay their loans so they may need those higher interest rates to recover losses and keep their business running.

[Shadiq]

Here it is most necessary to be aware of the reputation of the loan apps. Most people take loans in danger, in fact, they are forced to take loans. In this case, if he does not get help even after extending a helping hand to the people around him, then he is forced to take loans from those loan apps. However, there may be no big harm in taking a reputable loan. Before taking a loan, you should definitely read the agreement carefully and take a loan after being aware of the rules.

The main problem arises when someone takes a loan without any reason and expresses reluctance to repay the loan. Lending institutions most of the time take a strict stance and action against those who delay in repaying the loan and fraudsters. If you do not have the ability to repay the loan on time, then you should not take a loan from anywhere. Whether it is a loan app or from any person, a loan is always a trap.

[eaLiTy]

~
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.

Instant loan apps are a menace to society. The initial phase is a data trap; as soon as you install the app, it scrapes and uploads all your contact details, gallery data, and location to its servers. The second phase involves their collection tactics, which rely heavily on blackmail. Since almost all of these micro-loan apps are illegal and this is a major issue in India, I am certain the exact same thing is happening around the world as well.

There are seven suicide cases reported in my state of Kerala alone. The latest one involves a BDS student who died by suicide recently in April. The government has banned several of these micro-loan apps, and yet they keep popping up, and the victims are mostly students and housewives..

Source: Nithin Raj suicide

[Fiatless]

Instant loan apps are a menace to society. The initial phase is a data trap; as soon as you install the app, it scrapes and uploads all your contact details, gallery data, and location to its servers. The second phase involves their collection tactics, which rely heavily on blackmail. Since almost all of these micro-loan apps are illegal and this is a major issue in India, I am certain the exact same thing is happening around the world as well.

There are seven suicide cases reported in my state of Kerala alone. The latest one involves a BDS student who died by suicide recently in April. The government has banned several of these micro-loan apps, and yet they keep popping up, and the victims are mostly students and housewives..

Source: Nithin Raj suicide

Some of them are not totally bad. They could be helpful when you don't have money to carry out some important or profitable business. I once landed a job that needed me to upgrade my device. These loan apps were handy, and the profit I made was enough to pay off the loan. In my country, the government has come up with a regulatory framework to protect users from exploitation. It is recommended to use only registered service providers.

In extreme cases, suicide is sometimes caused when these loan apps are abused. It is common to see young people taking loans for gambling purposes or to finance something irrelevant. You would be surprised that some without any source of income are taking loans. And they will end up taking another one from another company to pay for the former.

[Bitcoin Smith]

~
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.

Instant loan apps are a menace to society. The initial phase is a data trap; as soon as you install the app, it scrapes and uploads all your contact details, gallery data, and location to its servers. The second phase involves their collection tactics, which rely heavily on blackmail. Since almost all of these micro-loan apps are illegal and this is a major issue in India, I am certain the exact same thing is happening around the world as well.

There are seven suicide cases reported in my state of Kerala alone. The latest one involves a BDS student who died by suicide recently in April. The government has banned several of these micro-loan apps, and yet they keep popping up, and the victims are mostly students and housewives..

Source: Nithin Raj suicide

Those random apps can't be eradicated because they just launch new app under a different name once the existing ones are removed from playstore. And people are so desperate for money they don't even read what access the apps asks while installing, and don't care what the loan agreement is, they just want cash that moment even if it is like 30 or 40% per annum with lot of hidden fees.

I use credcash while is quite transparenet, I do that to build my cibil score and never faced any issues with them also the credit line keep getting regular updates after successfully paying the previous withdrawals.

[nara1892]

I don't even see this as a mistake people make anymore because a lot of young people know what they are getting themselves into when they take loans from these apps but they just do it because they think it is something they can get away with. There are dangers of taking loans without paying back and even if the loan apps don't text you or call you they would allow the interest to keep adding up for as long as five years or even more than that so they can take a huge amount from you. In recent times this has become a serious issue and more people are falling into this trap.

The problem lies in their responsibility after deciding to borrow. I'd like to correct your statement slightly. People take out loans not because they don't see any consequences they know it's a debt that must be repaid. In my opinion, the rationale behind taking out loans is the ease of accessing any app to get money, and the process happens quickly and without anyone's knowledge, as it's done online on their phones.

But regarding interest, you're correct online loan interest rates are very high. I assume one of the reasons the apps charge such high interest rates is to cover losses from irresponsible customers.

[ejikeme24]

Loan is definitely part of human, but these loan apps have really high interest rate with a very short duration to pay back, so its really not a good idea to get loan from them. I really don't blame these loan apps, because they set these apps to make profit, so it's left for you to borrow from them or not.  It is also very bad that if you don't pay back at the due date, they will keep adding interest which makes it very difficult for the borrower to pay back. I really don't know how these loan apps make profit, because a lot of people don't even bother paying back once they realize that the interest is too much for them to pay. The loan app idea would have been a very good one, just incase of emergency and you need cash, but the interest is way too high, so I will suggest that the government look into it and try to make them reduce the interest rate.

Well, there is nothing you can do about that. It's a business of which there are other customers who are in need so if everyone delays payment it means that they can't attend to other customers. those interest they add is as a result of not paying back on time, and I feel it is normal. If you want to avoid extra charges it is simple, try to pay back on time. Sure there are some folks that don't bother paying back the loan they took, but they forget that Thier KYC details has been documented, if they can't reach out to you via phone call or other means. what they do is to tag you, after that they will publish it in the media for the world to see, and then your reputation will be ruined.

[Hamza2424]

This is also the problem in my country. They're receiving death threats, or threats that could traumatize them for a long amount of time.

I have also heard the same thing, that they threaten people so badly that sometimes a weak-minded person even commits suicide. There have been a few cases reported in my country as well.

Although I have never taken any loan from these shady and unregistered applications because of their high interest rates and the way they provide loans. I once saw an advertisement where they promoted their service as a solution for needy people who have to pay electricity bills because the bills become too high in summer. A person who is too poor to manage such bills will definitely take the loan without thinking much. Some people think, "We have only given our ID and phone number, what can they do?"

I also don't fully understand how they can misuse this information because banks can also use identification documents, but they follow proper procedures and requirements for a reason. There must be a reason why people feel so helpless after taking loans from these apps. No matter what kind of threats they give, they should not have the power to destroy someone's life unless the victims take those threats as absolute reality.

[HajiBagi]

Well despite the loan app is now seen as a treath to humanity, because of the high interest rate and so on, don't also forget that this loan app has helped to reduce the rate of stress looking for loan when there is an emergency. In my own personal point of view, there is nothing wrong with this loan company that offers help, the thing is that you are paying for the conviniecy. And another thing is that the loan is not by force, its a person decision wether to accept or not.

Loan app has helped many people but what they get in return by some people that take loan them is disappointment because when some people take loan they did not think about paying back the loan, many of youth now are opening online bank accounts and apps just to take loans from them and delete the app and when they start calling for them to pay back their loan they will not pick and some will pick the call and deny that he did not know what they are talking about, the loan help but it will be a good thing if the app stop giving loan because in my country many people don’t want to pay back because it is online loan

According to many reports, government did not want the loan should continue and the loan apps has be warned by the government to stop giving loans to the citizens because some of the citizens can not pay back the loan and the government don’t want that to cause a problem in the country, some people will take a loan of small amount and since they can not pay back in time the debt will keep increasing and that is one of the reasons why some people find it difficult to pay back, loan app can also use another methods by asking for some amount to anyone who want to take loan before approving the loan, that will help them to get some of their money back even when the person that take loan did not pay back in the end.

[Franklyn-wood]

Taking loan can be good, but it should be for business and business alone in a way that you would have earned more from the business before the loan time expired. But the way loan is today, it is very bad, students and people that are not working but having little bank inflow and outflow can also be able to borrow loan. In the past when people of this categories did not have access to this loan, they were living good. The problem there also is that if you pay back the loan, they will increase your limit. It has affected me before but I stopped taking the loan when I knew that I am losing money to the loan companies.

Loan online apps has helped a lot of people mostly during emergency where the normal banking system is not available to help out in some critical suitations. For instance when stuck on a journey without cash, or needs funds to settle something if ones financial records are good and up-to-date, the online loan app can give out loan to the person and the more you take and pay back as at when due, they gradually increase the amount to suit some other needs of the person. But one thing I don't really like about online laon apps compared to the regular banks is that, they give limited time to pay back the money with frustrating interest to be paid back in a short period of time.