Loans are one of those things that are neither good nor bad. A lot of wealthy people do take a lot of loans to enable them to grab an opportunity before it disappears and I guess that's one thing some people don't know about loans; it's great as long as it's utilized properly. Loans serve as a financial lifeline for many businesses by offering them opportunities to invest in growth but at the same time, they do come with their share of risks and considerations.
The major thing that discourages me from taking loans is the interest rates that are usually attached to most of them. You take a loan today to invest in a business and you're expected to pay a little extra than what you borrowed, and in some situations, you might even use the profit realized from the business to cover up the accumulated interest. You borrow $1000 today to invest in a business and are expected to pay back $1150 in a month but things didn't go so well and you made a profit of $160, then you pay back the loan and you're left with $10, what then is the point?
Another thing I hate about loans is the pressure to pay back. I hate borrowing or taking loans because of this and whenever I find myself in a situation where I borrow money from a friend (I always avoid loan apps), I usually don't have peace of mind until I pay back the loan, which means I pay back as soon as I have the money. I have never taken a loan in the traditional sense but I have done something similar that's called credit (just like the credit system in the US).
This service is available on Palmpay (for Nigerians) and it's called Flexi. It's basically a way to pay for services on credit and then pay back later. I use it mostly to buy airtime when I'm low on cash or when I'm too lazy to transfer money from my main bank account. The thing I love about this is that there is no immediate interest, but there's a due date (every 1st and 16th of the month) to pay back the credit and once it's past that due date, they start adding interest every day. That was what led to my bad experience with this service two years ago.
It was 2021 and I just completed my industrial training in Lagos. I was very broke during this period and I owed some money to my friends. My monthly Internet subscription is N6000 (around $5) and I mostly just buy it from palmpay on credit and pay it back on or before the due date. While in my broke state, my Internet subscription was about to expire and I had no choice but to renew it, even though I had no money. As usual, I bought the airtime on credit from palmpay but the problem was that the due date was the next day.
It got past the due date but I was still unable to pay because I still had no money. I was powering down my Hive power during that period but y'all know it usually takes a week to get some Hive while powering down. Since it was past my due date, they started adding interest. After two days, I didn't like the idea that the money I would pay back was increasing every day, so I asked for a loan from a friend who could only lend me half of the money. I paid it immediately while I kept waiting for the Hive I was powering down to show up in my wallet.
3 days later, I got access to some of my Hive and quickly sold them immediately, which helped me to pay back the loan. That experience only solidified the reasons why I hate taking loans, because I was under pressure to pay back considering Palmpay kept giving me warning messages every day. These days, I still buy things on credit with the app, but I only do so when I'm absolutely sure that I'm going to pay it back before the due date.
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It is very obvious that you don't like the idea of loans at all. Thank God you were able to pay the money before it turned into something else.
Yes o, the interest just kept accumulating but thank God I was able to pay off the loan. Thanks for stopping by