These Scary Reasons Will Make You not to Take Loan Again

[Jasz]

The first disadvantage of taking a loan is that it will make you passive towards your financial situation, with dependency on the creditor. Second disadvantage is that it always creates tension between the debtor and creditors there by making your financial situation complicated. Third disadvantage is if you don't know how to spend money in a saving way then you are already doomed in your new life. Next important thing is that if you are not book worm and avoid facing some issues in life then definitely it is not good for you to take out loans for your future life.

There are advantages of taking a loan, but there are many disadvantages associated with personal loan also.The major disadvantage is the interest rates for personal loans. The daily interest rates for these loans can range from 12% to 20 % depending on the lender. In some cases the loan can be up to twice as expensive as that of a credit card.

Taking a loan is not an easy decision as it has many cons. Loans are very risky, and can ruin your credit. Loaning money can give you stress, bad health, and a lot of other problems. The disadvantages of taking a loan do not really outweigh the advantages of having one. You should think about the risk before going to borrow money from someone or some company.

 

[btaliat]

Laon should never be an option for an intending business owner. Apart from the interest rate which are always difficult to meet by most intending business owners, there are some conditions that the laoner always out in place that may make the loan difficult to repay especially for an intending business owner. Aside this, business is not easy to predict, apart from poor management which may cause the collapse of a business, other unforseen situations as well can cause the collapse of a business. Which may make repayment of loan difficult for the borrower. It is always better to obtain loan if only there is need for expansion of business and not for starting up of s business.

 

[eldavis]

One thing I fear most and as well hate is taking loans and this is what I always advice others, taking loans is not the solution especially for does about starting a business. That's just risky. What if you take the loan for the business startup and it does not go as planned? How would you pay back? That's just putting yourself on unnecessary pressure.

 

[Caramelle]

Loans are usually burdensome because of the hefty interest rates and the periodic payments. Paying your loans while establishing a business will make it difficult for the owners to focus on what's important for the business in its early stages. It's risky because the business idea may not live up to expectations, causing the borrower to default on the loan payments. The results could be disastrous for one's credit and reputation. The best scenario is to save money for starting a business and to work within one's budget. It's usually better to start small and debt-free than start big and incur debts to cover deficiencies.​

 

[Kingsley]

Am not a big fan of those that likes to subscribe for loans, as I dont really think it is wise to access loan mostly as a start up for a business. it is very risky because in business even if you have done all your analysis and gotten everything right there are still some unforeseen circumstances that can still take place and get the owner bankrupt. Hence it will be good to aviod loans mostly for start up.

In a case where it seems as if accessing loans is the final resolve and their are no or way mostly when one has approached friends and family members for assistance then I would advice one think of someone or opens up the business idea and partnership with anyone who is ready to invest and become a co-investor and they will both Share profit and losses until a time when the person can Stand on his or her own. But if accessing loans is the only solution then I will advice to go for interest free loan if possible.


And if the business has been existing for sometime thei believe the business should be about to absorb the shocks waves coming it way.

 

[Abigael]

These scary reasons once caught up with me and taught me the lesson of never borrowing money anyhow. Having a pending loan can actually make you unhealthy and unable to concentrate with your life. You will be living with so much anxiety because you don't know when and how you will finish paying off the debt. You also have a bad relationship with your lender because they feel offended that you never paid them back. That gives you so much social anxiety as you feel that everyone knows you as that person who never pays back loans. Then having such a bad debt history may deny you many businesses and even employment opportunities and privileges.

 

[Alexandoy]

There are advantages of taking a loan, but there are many disadvantages associated with personal loan also.The major disadvantage is the interest rates for personal loans. The daily interest rates for these loans can range from 12% to 20 % depending on the lender. In some cases the loan can be up to twice as expensive as that of a credit card.

I think you made a mistake in the interest rate. The daily interest rate means you are computing the interest on a daily basis. For example the loan is 10,000 with a daily interest of 10% for easier computation, just in one day the loan will be 11,000 already. If the daily interest rate is compounded then on the 2nd day your loan will be 11,000 plus 10% of 11,000 which is 1,100.

Anyway, I agree that the interest rate will depend on the lender. For an individual lender that is not a company the usual interest rate here is 20% per month although lately, may be due to the pandemic, the interest rate of individual lenders are only 10% per month. Whether it is 20% or 10% per month that is still usurious that can kill the goose that lays the golden egg, so to speak. The advantage of taking a loan from an individual lender is the quick release of money and more often there is no collateral involved (for small personal loans only). But a loan is still an obligation whether the money came from the bank or not. As much as I can, I do not want to have a loan now.

 

[Good-Guy]

I think you made a mistake in the interest rate. The daily interest rate means you are computing the interest on a daily basis. For example the loan is 10,000 with a daily interest of 10% for easier computation, just in one day the loan will be 11,000 already. If the daily interest rate is compounded then on the 2nd day your loan will be 11,000 plus 10% of 11,000 which is 1,100.

Anyway, I agree that the interest rate will depend on the lender. For an individual lender that is not a company the usual interest rate here is 20% per month although lately, may be due to the pandemic, the interest rate of individual lenders are only 10% per month. Whether it is 20% or 10% per month that is still usurious that can kill the goose that lays the golden egg, so to speak. The advantage of taking a loan from an individual lender is the quick release of money and more often there is no collateral involved (for small personal loans only). But a loan is still an obligation whether the money came from the bank or not. As much as I can, I do not want to have a loan now.

I was already pretty much scared of taking loans or even borrowing a small amount of money. I will be really honest with you and I must say that Your calculations have actually scared me even more. I am a Muslim by faith and my religion teaches that interest should be avoided at all cost. I can now understand the wisdom behind why my religion prohibits interest. I think compounding interest is also pretty much damaging to the economy. Many world governments and financial institutions think that interest improves economy, but this is certainly a false notion. Actually, high interest rates damage the world economy. Apparently, it seems that charging interest rates benefits the economy of the country that provides loan, but this is much far away from the truth!

While "apparently" it could provide short-term benefits to the lender, it actually does harm to the country that is borrowing the money and to the country that provides loans! It should be noted that increasing the interest rates at a higher level could backfire a country. Whenever, the interest rates increase, the economical situation of other countries get worse and they also increase the rates of exports. This may also affect the countries that provide loans. According to an article published on Market Watch, interest rates are NOT an effective way to reduce inflation in the world.