Before Applying for a Loan: Five Things to Note

Before Requesting For Loan:

Need to get a loan for school fee, a loan for house rent, loan for upkeep, loan for business and more. All these are good thoughts and ideas. Do you know that getting a loan might be very essential for your business? We must also know that taking a loan can be harmful to us especially receiving a loan for business.

Getting a loan might be very essential for your business? We must also know that taking a loan can be harmful to us especially receiving a loan for business.

There are many online loan platforms that offer exciting loan offers, you have to download the apps for some, while others are standard bank loans.
Most of these online loaners, request for loanees’ collaterals and also go as far as to ask them to provide their BVN so as to get more of their personal information; other app loans do not collect collaterals. 

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However, the interest rate defer for every online loan app, while some give a 1 to 3.5 percent interest rate which is mostly applicable to banks, most online loan app interest rates are killing; asking you to pay a loan interest of up to 15 to 30 percent interest rate and even more within the period of 14days or more.

Initially, loans of the latter are harmful at first sight and looks very discouraging, but the thing is, most people do not have a choice than to go for it and continue life as it treats them; talking of the rate of poverty which seems inevitable.

As poverty grows day by day in many countries, mostly in African countries, people find possible means to survive as many take responsibilities that will never make them grow, but still they have no choice than to take them and carry on. People are addicted to a poor way of life, developing a mindset as they keep possessing the poverty mentality.

Most online loan apps, also require and compulse many people to give them access to their media and contact list on their smart phones after the app has being downloaded from google play store.

The first thing we should always beware of, is that they have access to our personal or private information. A lot of loanee, will make the loaners understand that if the loan is not paid at the due date, they will be given a grace of few days to pay before actions are taken.

Though, there are some online loan apps that give some few weeks extension after the expired loan time, but after it elapses, the loanee might regret taking a loan in the first place.

Loan is good when we can afford to pay back before the due date but when we cannot meet up, there is a problem and that problem is what we should try to avoid because it could harm us.

Do not start something you can not finish. It is better not to go close to loans when you know you do not have the capacity to pay back.

Most online loan apps send SMS to all the contacts on your phone which you have given them access to, as they notify your contacts that you owe them a certain amount of money which you collected as a loan. Some other loan company even go as far as arresting you until the loan is paid.

That looks embarrassing right? Well, it does look embarrassing to people who know the worth of their sim card, their reputation and the personalities on their contact list.
Another thing to note is that, when we give them access to our contact list, they check to see how valuable the list and the sim card are. These determine the amount of loan they could give the loanee.

Loan is good for business, moreover, no one is ready to help only if you take a step to help yourself, by taking a loan for your business. This could be a source of generating funds and could also help grow the business. Still, we should be very careful of what loan we are taking because that same loan that could help for a lifetime could also destroy us and our entire business in a short period of time.

Here are what you should know before applying.

1. Loan for Necessities: Why are you getting a loan? Is it for needs or necessities? These are few questions you should ask yourself. Do not mistake needs for necessity, some things are not priority but people do not understand this as they venture into things that they later regret. Some things are quite necessary but are not important so, choose wisely when applying for a loan.

2. Purpose: Collecting a loan most have a purpose and figuring out the wrong purpose could ruin your business and this is why many people’s business fail. How do you intend to generate profit from your business or whatever you want to use the loan for?

3. Kind of Business: Is the loan for business or personal use? If it’s for business, be wise in the amount you are applying for so you can be able to pay back.
Estimate the profit: Do not apply for a loan that your profit can not handle or settle, if you would collect a loan always estimate your profit. Most people could not pay back loans because their profit margin is quite lower than the interest rate of the loan which they applied for.

4. Can you Recover: Before applying for a loan, be very sure you can recover. Do you have people to help you out if things do not turn out the way you plannned? Do you have a standard and a trusted backup to help you out if you can not meet up? Though, most banks and other microfinance loans mandate a collateral, think about the risk of putting other people in trouble.

Taking a loan is easy but paying back is always difficult, before you apply for a loan make sure you read carefully, their terms and conditions, their policy and regulations, make findings and do better research and if eventually you have taken the above steps, then you can go for it. Remember, everything in life is a risk but do not put yourself in trouble when taking one. Take risks wisely.

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