The Truth About Loans Part 2

In the previous article of this series, you were exposed to a competent list of smart lenders. We can easily assert that getting a loan in Nigeria is as fast and easy as the falling of dew. But then the question remains solid, why should you consider a loan?
 
The simple truth is that sometimes, unwanted situations do warrant opting for loans. There are only two motives behind everyone that considers borrowing money as a last resort. Some people borrow for the right reasons, while some few others borrow for wrong reasons.
 
Swahili’s proverb says that “borrowing is like a wedding; repaying is like mourning.” Although this proverb originated from Swahili, it identifies with familiar feelings accompanying money lending affairs regardless of wherever you live. Another saying from Nigeria is that “money weakens the joys of friendship.” Both proverbs seem to be pointing in the same direction: paying back loans is not easy, and more often than not, it comes with tremendous discomfort.
 
Are you thinking of borrowing money? Before you borrow money, think twice and be truly sure there is a convincing need to borrow it. Now let us consider some important reasons why borrowing money could be inevitable.
 

Why Should You Borrow Money?

Health issues: emergency health issues may be a good cause to borrow money. Health challenges can sometimes be sudden, and without prior notice. One may have to spend lots and lots of money on medical bills. In such scenarios, borrowing money is inevitable!
 
Property acquisition: Many government workers have lands and even own private homes. You may be wondering how so, especially when you know their salary is not enough to acquire such an asset. Well, don’t be marvelled. These government workers use loans to buy those tangible assets and pay them back with their salary. That been said, how does a nongovernment worker take a similar loan? It is possible to take very low-interest loans from cooperatives and pay them back in due time.
 
Business growth: borrowing money to grow one’s business is an excellent idea.
 
On the other hand, I’ll advise you not to borrow money for the following reasons:
 

Why Not To Borrow Money

 
Starting a business: According to businessday.ng, the rate of startup failure in Nigeria as of 2020 was about 61.07 percent. It was believed to be the highest among Africa’s top three biggest tech ecosystems and investment destinations. This is 2021, naira value has nosedived, the price of commodities is skyrocketing, and the populace is losing interest in most things they buy before. Hence, borrowing money to start a business in such a harsh and unfriendly economy will be the worse decision ever. It is against the risk management rules, albeit everything is a risk, yet borrowing to start a new business is off it. Among other things, rates on these loans are egregious. They range from 2% to roughly 30% on short intervals.
 
Consumable product: it is not advisable to borrow money just to buy consumable products. Consumable products have been defined to mean several things, often in relation to specific usage, for the sake of clarity and in relation to this context, consumable products or consumables can be said to be those goods or products that are meant to be consumed such as food and water, consumables may refer to articles or items designed to be used and be discarded, it may also refer to cloths shoes, and likes.
 
Fake life: To be precise, leaving a fake life is one of the paramount reasons why some people take loans, as unrelated as this may sound, several people are spending far beyond their income buy expensive things that are of no vital usage, they heavily rely on loan from friends and family and IOUs at work, as soon as they get these soft loans, they treat it as though it is a national cake and will never pay back, for sure they won’t be able to get more loans from their friends, family and relatives, hence, smart lenders come to their rescue.
 

SOCIETAL SHAMING

What are the steps taken by the smart lenders when a debtor defaults? Put differently, how do the money lenders handle a defaulter?
 
A person can default to the smart money lenders by not paying back the loan in due time. Believe it or not, these cooperate entities have access to your contacts via your network provider(s). They have access to a user’s saved contact. They pick the defaulter’s contact list and send a message that is often extremely degrading and inhumane to all the user’s friends and families.
 
They will send it to each and everyone whose number you have ever saved, as if that is not enough, the defaulter may get reported to the credit bureau. The debt will eventually reflect on the defaulters BVN!
 
Some of the messages received from the smart lenders is captured below:

Several people received this message, calls and gossip are everywhere in the air about the debtor. The person could hardly work on the street without being confronted by people who know her. This is complete societal shaming!  

Conclusion: Everyone shall decide if whether or not to take a loan. This write-up only clarifies loans and the reasons you take into cognisance before taking a loan. If you need quick money, you have to work for it, or try rewards sites like Payspieloo.

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