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

[hedgeh0g]

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.

Banks are fighting each other more aggressively in pursuit of customers, and as a result they are constantly making annoying advertisements and also lowering loan rates, but this is not a good thing. Yes, I know people who live only on credit cards, but this is a bad way to save their future.
Sometimes such people need to admit that they have failed financially and start saving by paying off debts rather than trying to continue spending money that does not actually belong to them. And especially women are susceptible to this. They love a beautiful life, but they don't like learning financial literacy...

[citywise2]

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.

Yes taking loans can be good when done appropriately and with means for paying back. A business cannot farewell  when it's funded 100% by loans. Although most business consultants would recommend borrowing to run a business, but what is not stated in black and white is so that they can fall back on their own money should things turn bad.

[Itz-prisigold]

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.

I believe loans are one of these things that might sound good in theory, but doesn't always work out the way people think.  If the funds are being used for a business, you can not actually be certain that the business will earn sufficient profit before the repayment begins. We all know that the world is full of surprises, because things like drop in sales, an increase in life expenses or a change in the market can always happen.

So I think it is better for you  to only borrow when you have actually think of  the risk involved and you actually prepared a backup plan to deal with it. The loan may be helpful, but it should not be seen as a means of starting and expansion of a business.  It may be better to grow slowly with your own money if you want to have peace of mind and don't want any financial pressure.

[Makus]

Yes taking loans can be good when done appropriately and with means for paying back. A business cannot farewell  when it's funded 100% by loans. Although most business consultants would recommend borrowing to run a business, but what is not stated in black and white is so that they can fall back on their own money should things turn bad.

Business consultants say things based on professionalism and not personal experience, of course they are going to advice you to take a loan but do you think if they want to run a business for themselves they are actually going to take a loan? Empathically no. Running the fire few months of a business with a loan as the capital means that you might not really make any significant profits during these period of time because what comes in will go to payments of the loans you took and in some cases raising the money is almost impossible.

[Versatile_choice]

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.

Yes taking loans can be good when done appropriately and with means for paying back. A business cannot farewell  when it's funded 100% by loans. Although most business consultants would recommend borrowing to run a business, but what is not stated in black and white is so that they can fall back on their own money should things turn bad.

Well, I would advised that you should avoid taking out loan. If there is any business that requires taking out loan then I would suggest you let go off it and look for a different one or better still you keep  saving up until you save up enough capital that will be enough for you to start up the business rather than taking out loan because it's very risky.

Remember there is no business or investment that is risk free, all business is associated with risk that is the more reason why you need to think twice before taking out loan to invest in any business or investment because there is no guarantee that you will succeed in that business.

[Davidvictorson]

Taking loans from unreliable loan apps have unreasonable surging high interest so I don't suggest them as a good option. But taking loan remains a wise strategy, especially if you plan to put it up on a smart investment like bitcoin or gold, or build up a business that you are highly sure that the business will click and profit because you know well how to make it work.

However, there are factors to consider before taking a loan, like one should only have a small interest surge, borrowing on the amount you can afford to pay, most especially only take a loan when you have a reliable income to pay, and not because you rely on the future profits of your investment when you don't even hold the guarantee if your investment will make it long enough.

I like your balanced view. Your points resonates with me. To add;
There are reliable loan apps and then there are loan sharks.
When borrowers don’t do their homework and are very desperate they fall for loan sharks. That alone would cost them more than whatever amount they have loaned.
On the side of the borrower, if you do not have a steady source of income avoid taking loans. Always check the interest on loan repayment. Lastly, have a repayment plan A and B from experience plan A usually fails.

[Iroh]

A loan can be a financial sinkhole to many and can still be a much needed boost that could help enable you generate even more money. It all depends on what the loan is for and how it is used.
Perhaps, as it has become easier to access these loans, a lot of people are now turning to taking out large amounts in loans only to indulge in frivolities. If the process to get a loan were stringent, demanding a collateral equivalent to or more than the loan amount, then people would be more prudent on how they apply and use such loans.

Taking a peek at the loan services run by members on the forum, it has helped a lot of people that were in a fix and needed help. It has also put others in a cycle of debt that sometimes, eventually end up in a bad debt.

[Renampun]

In my country, online loan ads are poorly filtered, for example, without content tailored to age.
Furthermore, new illegal loan apps appear every week, offering offers via random text messages. People of all ages are exposed to loan offers, regardless of their financial background. Worse yet, they offer very easy loan applications, which has led to numerous cases of data misuse in recent years.

This is also a problem in my country, where online lending platforms massively market their services through text messages and social media ads.. they offer a very fast disbursement process with very low requirements. What happens is that so many people become involved in online lending, the number is even alarming, to the point that the government has formed a special task force to be able to handle this.. because it is increasingly a problem that these lending platforms are working with debt collectors to pursue users who cannot repay their loans, which can lead to criminal acts. Also, these online lending platforms can use their users' data so freely and even keep their users trapped in a cycle of debt with offers from similar applications from their companies.

[viljy]

Credit in general, as an element of the economy, has a positive effect only when crediting production, since it "smooths out" the producer's risks between him and the bank. And usually such a loan is repaid from the manufacturer's profit. But consumer credit is something completely different.

Especially household loans from microfinance organizations. This is, in general, ordinary usury with high interest rates on a loan. Unlike loans to producers, such loans do not have a positive impact on the economy. Rather, on the contrary, they drain money from consumers, and thereby reduce the effective demand of the population. The more microfinance organizations thrive in the economy, the worse its condition. Not necessarily for that reason alone! But the indebtedness of the population exacerbates the decline.

[Leahized]

Well, I would advised that you should avoid taking out loan. If there is any business that requires taking out loan then I would suggest you let go off it and look for a different one or better still you keep  saving up until you save up enough capital that will be enough for you to start up the business rather than taking out loan because it's very risky.

Although the word loan is very risky, it has become normal nowadays. Because most people take loans to do any big work or to do business. And move forward in making more progress financially. You won't find any company where they don't take loans from banks. Moreover, many farm business in my area raised money through loans and reared cows. which is repaid annually. So if there is ever a definite plan, then the loan will never create a problem.