Things you should consider before going for quick loans
The sad story of a 20-year-old student from the University of Ilorin who tragically took her own life due to her inability to repay a debt of N500,000 owed to some loan apps, highlights the crucial importance of conducting thorough research before borrowing money. This is because loan defaults could be traumatic.
According to the report, the late Unilorin student wanted to use the loans she collected for an affiliate marketing business, which eventually failed.
Like this student, many people have been trapped in a cycle of debt because they did not do diligence before going for loans. Many individuals fall into debt due to unrealistic promises of high business returns and excessive borrowing.
The sad story of the Unilorin student underscores the importance of careful financial planning and the need to focus on investments with a high probability of success rather than gambling on uncertain ventures.
Many individuals turn to loans as a means to achieve their goals, using them to bridge financial gaps that might otherwise prevent them from realising their aspirations. Whether it is buying a home, or car, financing a wedding, starting a business, funding travel, or maintaining a specific lifestyle to meet societal expectations, debt often becomes a tool in the pursuit of fulfilment. Unfortunately, some individuals even resort to taking out more loans to cover existing debts, unintentionally locking themselves into a never-ending cycle of financial obligations.
In a world where the allure of debt can be deceptive and appear as an opportunity for advancement, it is essential to approach financial matters with prudence and discernment. The key is not to avoid loans altogether but to use them responsibly, always having a clear and realistic repayment plan. Every financial decision should aim to lead us towards our desired future, free from debt and its risks.
According to Money Africa, loans affect people in the following ways.
Continuous cycle of debt
This occurs when you need to take out new loans to repay existing ones. You don’t want loan apps coming after you, so you end up borrowing high-interest loans to settle your current debts. Once you embark on this path, it can become extremely challenging to break free because you will find yourself paying even more in interest. This only provides temporary relief.
Financial Impact
One of the most immediate effects of loans is the financial burden they place on borrowers. Monthly payments and interest can strain budgets, potentially leading to stress and anxiety.
Loans enable people to acquire assets like homes or cars. This can improve one’s quality of life and provide a sense of accomplishment. However, it is essential to recognise that relying on loans alone can provide only temporary relief and may eventually lead to a debt cycle. The most prudent approach to fulfilling such goals is through diligent savings and financial planning. Not only does this enable you to acquire the assets you desire, but also helps you do so without the weight of excessive debt.
Emotional and psychological impact
The weight of financial obligations can lead to stress and anxiety, profoundly impacting one’s mental health. The constant concern about repayment and financial stability can gradually erode overall well-being. This turmoil can have repercussions that extend beyond personal life. It can influence your level of productivity and affect your performance at work or in your business.
In some cases, it might even reach a point where employers are compelled to make difficult decisions like relieving you from your job due to these issues. If you are a business owner, the mental strain can hinder your ability to devise effective strategies to propel your business forward, potentially resulting in stagnation or decline.
Lifestyle and relationships
Loans can delay life milestones like marriage, having children, or retirement. The need to repay debt often takes precedence over personal goals and causes strain in relationships. Disagreements about how to manage debt can lead to conflict within families and between partners.
Career and opportunity
Some individuals may opt for higher-paying jobs they dislike because they need to repay loans quickly, rather than pursuing a career they are passionate about. The weight of debt becomes such that it compels them to prioritise financial obligations over their own passions. This can lead to years spent in a career that does not bring joy or fulfilment, all because debt must be repaid, and bills must be met.
The fear of financial instability caused by loans casts a shadow over one’s professional aspirations and influences the paths they choose. This fear might dissuade individuals, including potential business owners, from pursuing their entrepreneurial dreams and embarking on new endeavours. This deprives them of the chance to follow their passions and ambitions.
To minimise the negative impact of loans, the financial company advised that it was crucial to approach borrowing with careful consideration.
“Understanding the terms and implications of loans, creating a budget, and seeking financial advice can help individuals manage their financial health and mitigate the potential adverse effects of debt,” it stated.
Very interesting
We dont need to blame them
SITUATION IN THE COUNTRY WARRANTS THIS
Yea