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

[Bitcoin Smith]

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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.

It is a sad reality, and these illegal ones usually target users who do not have a good credit score to source a loan from legal platforms.

A low CIBIL score itself a sign that they are not the best candidate to take out loans, but in some cases they might really want to work it out and in need of some cash can opt out these highly shady loan apps, but their job is not done with taking the loan but with the complete repayment which is a behavior that tells the real picture about the individual too.

I don't know about others, but if I take personal loan or some other high interest rate ones, I will just channel all the money into that loan closure which will give me the peace to work freely once it's done.

[blockman]

A typical problem on this generation, the society has changed a lot and there are a lot of contributors that made this thinking to the public. I'm not blaming them though but, the continuous bragging and being showy of the content creators make its audience think that it's okay to live a life that they can't afford. And it gives them the pressure to themselves that they'll have to take loans for them to brag and not to inspire people. It's a sad generation that's putting more screen time than to give more value of their time like spending it with something that's more meaningful. All it takes is a simple mindset to remove impressing people and live your life within your means.

[Dogedegen]

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They are not, I already explained it above and you didn't read my post. Anyone who commits suicide because of this is at fault, not the apps providing the loans. Such loans are available by reputable establishments already such as banks and depending on the country the rates can be 5% to 25% or even more per year with many providing near instant approval. That is not any different from these instant loan apps that you talk about, which must have worse terms than the respective banks in the countries. We need to stop blaming others for our own decisions and faults, it is time to become more responsible people and not give excuses for the wrong decisions. Many of these loans were taken as spur of the moment decisions, for reasons of greed or envy. Definitely in those cases no blame at all falls on the loan provider, only on the loan taker.

I am not sure whether you are reading everything that I mentioned in my post. I will quote it for you again so that you can read what is written very clearly.

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.

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The 22 year old BDS student from Kerala who died in April took a tiny micro loan explicitly because his mother desperately needed medical treatment. He was not trying to fund a luxury lifestyle; he was trying to save his mother. The operators went after his college faculty, morphed his photos, and harassed his social circle until the shame became completely overwhelming and took his life.

If you seriously think that this is normal behavior for instant loan app companies, then I have nothing more to say. I am not living in a utopian virtual reality to accept this as normal human behavior, nor should a financial company be allowed to blackmail and harass their customers just like that.

I did, and the case that you brought does not say anything against what I wrote. You took a very bad example and then made very big generalizations against all kinds of loan apps which is incorrect. We can never make judgements about a whole sector simply because there are some extreme cases. In most of these cases the issue lies entirely with the user. There are only 2 ways to get back your money from the perspective of the lender and they are either legal ways or illegal means. The reason why companies or individual resort to illegal means is usually either because the legal system is weak and does not protect the lenders properly or is very slow, or because the loan its is not legal in some way. In many cases loan sharks behave the way that they do not because they like to do it, it is because the people don't pay back the money that they owe in terms that they agreed on. We need to separate clear cases.

Case 1: Loan shark acting crazy, unreasonable, asking more repayment beyond what was agreed. This is truly bad and the fault lies at the loan shark and they can be considered evil. This is what you would see more often in movies.
Case 2: Loan shark demands money as agreed with the person, person does not pay back as agreed for whatever reason. This is when they try illegal tactics because they have no other choice! If the loan is illegal or it is a person or company that does crime, then there is no way to demand this money back legally. They can only try illegal tactics or accept that the person may never pay back. They can never accept that someone does not pay back or they will go bankrupt, everyone would try to get a loan from them and try to cheat them this way. That is why they enforce this system with violence, because it would not work at all otherwise!

So in cases of number 1 you are right to blame the lender, but in cases of 2 the blame is always at the borrower. If people paid their money back as agreed there would never be a case like 2 in existence, but they don't and that is why lenders get violent and do all kinds of illegal things like the blackmail that you have given as an example. Banks don't have to deal with that kind of stuff because they do things completely legally, they will take your house, collateral, or start legal proceedings against you without waiting even a moment. I really dislike people who don't pay back money, I have lost many friends to small amounts of money and I know many others who had the same happen. People who don't pay back what they owe are terrible people, it does not matter what you use the money for because it is not yours and you have to pay it back no matter what.


Again the point is, this person did not have to take the loan to provide medical treatment to his mother. Don't use good sounding reasons as excuses for bad behavior, that was not a trap because he inflicted it on himself. The responsibility in cases like that are always on the loan takers. For example if you take a loan from a local and known violent loan shark, then you accept anything that can come as a result from that!! Don't blame the world for your persona mistakes.

Although, you can’t create a budget without knowing the difference between your needs and your wants, which is the main reason for a budget. Because if you can’t differentiate them, even with a budget, you will still end up taking a loan. Which if the interest becomes higher you become disturbed, because you can’t pay it anymore, and the loan apps will definitely call for their money.

The issue with the young generation is also that they are letting the internet expand their needs with lies so many things that are wants they believe are needs. Also they keep increasing wants into all kinds of things that are not good for them, so that is making it worse too.

[Cheema02]

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.

It's very interesting to understand that how can people takes loan online through loan apps, even though they know how much of a burden of installments they can face after that? Currently, due to inflation and a low employment rate, people are so helpless that they are easily trapped by any loan app because when they take it, only one thing going in their minds and that is instant money. But they don't have an idea how they can repay it. Sometimes taking a loan is beneficial, but if you use this money wisely, like me, once I took a loan from Jazz Cash to invest it in a phone dealing, and that deal was successfully done and earn a good amount from it and I easily repaid this loan so in this way borrowing is not good. At the end it's depends on your mindset and whether you ever take a loan from any resource.

[Sticky Bomb]

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.

This their exorbitant interest rates is the reason some mean guys don't pay their loans and ignore them until the loan is long overdue and they start giving you a discount so you can pay to enable them balance up their books. They know they charge interests to cripple people financially, yet they take advantage of people's vulnerability to extort them. A lot of people who know loan default is a civil offense and not a criminal offense are getting more mean in their resolve not to pay back.

I don't like loans, I would almost never take one, not to mention those with high interest rates. Loans make you feel like you've got a handy extra money to spend, not knowing that you're utilizing your future money at a present time.

[WatChe]

It's very interesting to understand that how can people takes loan online through loan apps, even though they know how much of a burden of installments they can face after that? Currently, due to inflation and a low employment rate, people are so helpless that they are easily trapped by any loan app because when they take it, only one thing going in their minds and that is instant money. But they don't have an idea how they can repay it. Sometimes taking a loan is beneficial, but if you use this money wisely, like me, once I took a loan from Jazz Cash to invest it in a phone dealing, and that deal was successfully done and earn a good amount from it and I easily repaid this loan so in this way borrowing is not good. At the end it's depends on your mindset and whether you ever take a loan from any resource.

We must avoid loan at every cost because if someone is under stress due to non-availability of funds and he takes loan without any proper plan then the loan will add more to his stress. If you take loan then you have to repay it timely with interest otherwise interest will keep increasing. You have done the right thing, you take the risk of going for loan but with proper business plan and that is prerequisite for every business i.e. a proper plan.

The mobile loan apps have done so much destruction in my country (Pakistan) that government has to step in and put a ban on all such mobile apps to avoid further destruction.      

[Rabata]

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.

I don't like loans, I would almost never take one, not to mention those with high interest rates. Loans make you feel like you've got a handy extra money to spend, not knowing that you're utilizing your future money at a present time.

Loans are one of the reasons that hold a person back financially. Those who take loans will be worried about the consequences. Nowadays, the loan system has become so easy that anyone can get a loan if they want, but taking a loan should never be for everyone. If you take a loan, you will try to take more loans later. Those who have taken a loan once try to take loans again and again. Paying extra interest is a loss for the borrower. On the other hand, if the borrowed money cannot be invested in any profitable work, it is a cause of even greater loss. Moreover, taking loans has a major negative impact not only from a financial perspective but also from a mental perspective.

It is not that borrowing is always bad, there are many who have been able to benefit from taking this loan. How much profit or loss a borrower will face depends mainly on the imagination of the borrower. Before taking any loan, you should definitely ask yourself a few questions.

• Do you really need the loan you are taking or is it being taken for temporary inconvenience?
  
• Are those who are taking the loan aware of the interest rate and how much profit they will have to pay against the loan?
  
• Will I be able to repay my loan properly after taking the loan?

[Faisal2202]

A typical problem on this generation, the society has changed a lot and there are a lot of contributors that made this thinking to the public. I'm not blaming them though but, the continuous bragging and being showy of the content creators make its audience think that it's okay to live a life that they can't afford. And it gives them the pressure to themselves that they'll have to take loans for them to brag and not to inspire people. It's a sad generation that's putting more screen time than to give more value of their time like spending it with something that's more meaningful. All it takes is a simple mindset to remove impressing people and live your life within your means.

We can start the awareness from our surroundings. My teacher once shared this information and how they trap you in one of our classes. He is very smart, and the facts he shared opened many eyes, and I shared that information with everyone I could. The process of loans is different everywhere, but here we just have to give our ID and number for registration on the application, and we can get a loan. The process is easier, but when it comes to paying them back.

It becomes very hard for all. Repaying a loan alone is hard, then add interest to it, and the interest will be a lot. The interest is not the main problem.

The hidden fees and policies that most of us agree on without reading the policies are what make life harder.

[Princess Leah]

A typical problem on this generation, the society has changed a lot and there are a lot of contributors that made this thinking to the public. I'm not blaming them though but, the continuous bragging and being showy of the content creators make its audience think that it's okay to live a life that they can't afford. And it gives them the pressure to themselves that they'll have to take loans for them to brag and not to inspire people. It's a sad generation that's putting more screen time than to give more value of their time like spending it with something that's more meaningful. All it takes is a simple mindset to remove impressing people and live your life within your means.

We can start the awareness from our surroundings. My teacher once shared this information and how they trap you in one of our classes. He is very smart, and the facts he shared opened many eyes, and I shared that information with everyone I could. The process of loans is different everywhere, but here we just have to give our ID and number for registration on the application, and we can get a loan. The process is easier, but when it comes to paying them back.

It becomes very hard for all. Repaying a loan alone is hard, then add interest to it, and the interest will be a lot. The interest is not the main problem.

The hidden fees and policies that most of us agree on without reading the policies are what make life harder.

Loans are not bad cause it can be leverage for, education, finance, or business, those are good cause but the person taking the loan should make sure they have a means of payment back, it becomes a problem when a means of clearing the debt isn't available cause it could end up leading to embarrassment of the loanee.

 Some people don't even have good reasons for taking loans, you could imagine someone taking loans to gamble, an event that success isn't guaranteed, how do such person expect to pay back if it happens that clearing the debt is dependent on the gambling reward. You could see the foolish extent at which some people go to put themselves in debt they can't pay back.

[GiftedMAN]

Some people don't even have good reasons for taking loans, you could imagine someone taking loans to gamble, an event that success isn't guaranteed, how do such person expect to pay back if it happens that clearing the debt is dependent on the gambling reward. You could see the foolish extent at which some people go to put themselves in debt they can't pay back.

Those who take loans when they are not investing in a profitable business are jokers. Taking loans to finance a business project is good because you are sure of paying back Once you execute your project but what shouldn't be done by anyone is taking loans to invest in a Ponzi scheme or use it to gamble cause they are not sure of winning and if they do not pay back the companies where they took the loan will be on their neck which can be frustrating.

People should be smart enough to avoid putting themselves into unnecessary risk which could put them in a difficult situation, if you must gamble it should be from your own money nit from the money you took from loan cause the risk will be too high if you lose your gambling.

[Chinesebaby]

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.

A person who does not have money can not save, hence, this good financial habits you are talking about is not for people who don't have money and barely feeds. Because I'm very much sure that before an individual picks up his phone to borrow money from a loan app, then it simply means he or she doesn't have money at all. And moreover, the high rate at which these app who gives loan to people is really alarming, especially the one most of the online loan apps does here in Nigeria. Because there was video that went viral few weeks ago about a man who borrowed #100k, and was supposed to pay #120k after 30days, and unfortunately, he wasn't able to pay at due date. But could you imagine the #100k grew to over #350k with interest and late payment.

[2stout]

It comes down to good debt vs bad debt and also taking into consideration the interest rate, means to repay, and reserves on hand to still pay in case of an emergency.  A miss on any the these considerations is an increase in failure; miss on more than one of these consideration is an exponential increase in failure.  Too much and unmanageable debt forces you to stay in situations you shouldn't, hence the trap.

[Emjay24]

Loans are not bad cause it can be leverage for, education, finance, or business, those are good cause but the person taking the loan should make sure they have a means of payment back, it becomes a problem when a means of clearing the debt isn't available cause it could end up leading to embarrassment of the loanee.

Start or support your business with loan from these loan apps? That's ridiculous especially when we know that these apps charge as much as 20% interests in 2 weeks and some incredible penalty if you fail to meetup. I don't see how it's a good thing for your business, it may well drag your business to ruin if you intend paying that kind of loan from the proceeds from your business, unless your true intention is to take the loan without repaying as many people do here in my country and that's not good at all, you agreed to the terms and conditions, so you ought to be bound by it.

[Iamgoat]

It comes down to good debt vs bad debt and also taking into consideration the interest rate, means to repay, and reserves on hand to still pay in case of an emergency.  A miss on any the these considerations is an increase in failure; miss on more than one of these consideration is an exponential increase in failure.  Too much and unmanageable debt forces you to stay in situations you shouldn't, hence the trap.

Desperation is what makes alot of people fall back on taking debts though it may not be the case for everyone. Those who take debts for lifestyle choices are those who suffer the most because their reasons do not allow them to check those boxes you mentioned above therefore turning their debt into a bad debt. Those who take loans or debts through desperation can be as a result of business or financial difficulties tied to healthcare. If such is the case, it is better to have those considerations in mind while you take the loan so you also don’t fall into the category of a bad debt.