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.

[Somegory]

Loan apps are not a treat to me, if it is to you that's because you lack control, I can drop screen shot of my bank app here to see , you will see that I am given the chance to take big loans out in my name, I still don't do it.

Because I don't need to, for me exactly? It's never in my style to take loans for any reasons, I was not brought up using debt or collecting loans to make more money, if money is the problem we go out and work to get paid, not taking loans.

My bank app has ads promoting gambling too, I know they are doing marketing and getting paid but it's not very health for their customers and again they did it for money too, so it's left for users to stay in their lane.

[kingstep]

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.

The challenge that comes with taking up a loan to run a business is that it comes with a lot of pressure such that you are not just trying to find a feet for your business but at the same time you are trying to ensure you get your profit as fast as possible so that you can first sort out your loan needs and at the same time boost the longevity of your business.

Taking up of loans can help in the expansion of your business after you have set certain things in place and have to expand as a matter of urgency. if it is with respect to that, then a loan can help to make that happen but outside of that, you have to hustle to make your money that carter for your business and work to make sure that the business brings about returns that settles your capital. online loan is easy to get but they can be a serious problem to you if you fail to pay as at when due.

[Taricoins]

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.

One thing i have observed and it's total facts is that once taking loans for consumer consumption hits the value of the income to pay back that loans, that's when the problem escalates. Because the money coming into the account of the consumer as income doesn't match the Interest, it will lead to an ever increasing demand of loans to pay back already dued loan. It's a a drug tolerance situation where you will need an ever increase value of loan to pay back past loans.

[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.

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.

True, and I agree with what you say about desperation.  Speaking from experience, I would say most desperation regarding debt was set in motion and created by bad choices.  However, I have also witnessed cases where people have taken good care of themselves and still had a medical event in which treatment was necessary for life, but the price tag was beyond any money that saved or accumulated.  This is a desperate situation which calls for desperate measures and results in debt to save one's life, not the result of bad choices.  Saving one's life would seem to fall under good debt.

[Faisal2202]

That's true, they made the process even easier and that's why whoever have that ideals of wanting to get something can be done easily because of the loosened process for getting a loan. I've noticed this in my country that before, it takes a long process just to get approved and going back here and there to the back just to comply to the requirements. Today, it's just a few clicks and pictures away. I think many of who are used to taking loans only are looking to the loan amount and even grateful they're approved despite all the fees indicated in that loan.

We have at least two famous applications here. I don't know if they are regulated by the government or not, but they run a lot of ads, and whoever is eager to earn money online and spend their time on gambling sites usually happens to see these ads because they need the money all the time.

Once they take all the loans from these apps, and these apps threaten to block your ID using official complaint methods, you will be too late, the interest will make the repaying amount 4x of what you took, and that high amount will be out of your budget to repay.

Therefore, always be vigilant and never take loans from any apps, even the ones that are regulated.

[Orpichukwu]

You’re 100% right on this. Loan is a tool in the hand of a carpenter, it builds a house. In the hand of a child it causes injury. Your last line is the wisest: don’t borrow against future profit you can’t guarantee.

And what destroys some people most times is their reason for taking a loan, especially those who put so much hope and expectation on something whose result is based on probability. Sometimes I believe what contributes to some of their problems is easy access to those loans; if not, I don’t see a reason why some people would take a loan to satisfy their wants when it’s something that can stay without it until some people are able to realize the difference between their wants and needs; they will always, always be in increasing debt.

[Muba20]

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.

Sometimes a loan can be a great tool in doing business if the loan money is used properly and there is an alternative arrangement for repaying the loan money. There are many things required to set up a business, which cannot always be done with the entrepreneur's own money. Many businesses require various resources to sustain, especially at the time of starting the business. It may be something related to production or the purchase of equipment. If you rely solely on loans to establish the entire business, it will undoubtedly be difficult to establish that business because you should not rely entirely on the loan money. If any problem arises, there will be no way to repay the loan.

Those who have gained good experience in business area are not against loans, but they certainly prefer to take loans, but before that, they also consider how much their personal funds are or whether they have the ability to overcome any temporary financial crisis in doing business. If a business owner always relies on loans, they will not be able to run their business smoothly. That is why it is very important to have your own funds. In my opinion, taking out a loan is risky if there is no good alternative for repayment.

[Showlove01]

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.

You have made a very valid point here, the only way I can consider loan app or loan company valuable is when there is an emergency that requires finance to solve the problem outside this I don't like anything loan or borrowing I may not have a genuine reason but I don't  like it. I think loan before was meant to help people with finance and not a way of estorting money from people because this days what these company does is estortion and they now advertise it, frankly speaking I fucking hate to see those adverts.