Loans: Important Things to Know Before Applying for a Loan

KuyaManzano By KuyaManzano, 23rd Feb 2015 | Follow this author | RSS Feed
Posted in Wikinut>Guides>Money Saving Tips

While some loan providers rely for the applicant’s honesty or reliability, most of the assurance given is just verbal. On the other hand, some loan providers find it so easy to renew your debt on the fly in case it defaults. Don’t you think it’s about time that analyze everything you need to know first prior to getting that cash?

For others it is a lifeline when they can’t borrow money elsewhere.

But do these lenders care if they are lending to the right people? Do they care if the people can afford to pay the loans made or not? Did it take several renewals for you to realize that? Hopefully you are not yet in a situation that will be described later here.

Borrow here, there and everywhere
Some people deal with several payday loans. If they can’t pay one, they would borrow from another and use it to pay the previous loan. It sounded somewhat similar to individuals who get another credit card to pay a previous credit card gone delinquent. Main difference here though is that it is in cash. When you have only one paycheck and 7 payday loans, you then realize how far have you gone to keep everything paid only to find yourself in deeper debt.

And I problem I saw here is that some folks in debt got so concerned about paying the previous debts first without realizing that debts got stockpiled on top of the other. In other words, these debtors get short-sighted. In this way, they miss the big picture where instead of focusing on getting the previous debt(s) paid first, they just go “I can get another loan to pay the previous one”. Now that you got yourself into another debt, you end up having to work harder and getting stressed more all for the sake of paying those loans.

Does it feel like you’re just working so hard just to pay off your loans instead of sustaining yourself? It really happens. It gets quicker when “temptations” are all over the place.

Getting more loan ads
Other companies offer to lend him money even if he could no longer afford to pay his numerous other loans. This begs the question “Did my personal information got sold to a whole network or loan providers simply because I provided it to them?”

Previous debtors, before even getting hold of the money they borrowed, get bombarded with these SMS messages offering loans. Worse, those who already made loans in the past that they have yet to pay still get bombarded with texts offering them loans. You realize then a system that will keep you indebted to them because you will always have that tendency to borrow from them when you can’t pay anymore. It is a grim scenario but once that keeps on finding you because most debtors borrow first and think about it later. Not cool but it s true story, bro.

Not that some of them are not blaming themselves for the predicament that they got into but perhaps if there was enough effort on their part to remind their debts, mostly weekly payments if it involved payday loans, maybe there would be less interest rates to worry about.

Debt renewals despite multiple defaults
This article is not written to encourage you to default on your loan. But in this angle, you can also see why some loaning systems keep you in debt. It seems as if they already anticipated the default. But instead of helping you avoid it by constantly reminding you of how much you needed to pay and what penalties apply in case you default, they simply let it default. You are left at the mercy of the loan providers. You have no control over the interests imposed on these defaulted loans because there are almost no laws regulating them.

Lack of background check
Finally, the biggest reason why debtors get buried in debt as easily as they initially got the money. Most of these loan providers don’t use external credit reference agencies to check your paying capacity. Others claim that they conduct stringent credit checks. How did the individuals who already declared bankruptcy made it to their list then? It gets me thinking about the list of leads they bought from some lead-generating agency automatically gets included into their “stringent credit checks”. It would be hard to analyze the paying capacity of an individual whose identity is just known to you as an obscure email address.

Also, the fact that some loans are so easy obtain should be subject to a few interesting questions then. Was there even an effort exerted to research their financial health? Net worth can be a good barometer for analyzing a person’s capability to pay. But analyzing how they pay their bills and how they spend for their daily necessities can also be a good background to check. A person may not have money now. But if he or she is employed then at the end of the month, he or she would have enough dough to pay obligations.

Getting qualified for a loan is easy. Perhaps this article has emphasized it often enough. But are you ready for the consequences that come with availing for a loan? Hopefully, you would be content at just one. Life would be easier that way. Glad to be of help.


Loans, Loans With Poor Credit

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author avatar KuyaManzano
Actor, singer, director, producer, writer and businessman.

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author avatar Shamarie
23rd Feb 2015 (#)

Thanks for sharing this informative and helpful article, Kuya! And congrats on being "Author of the Day"!

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author avatar KuyaManzano
23rd Feb 2015 (#)

tks a lot, had no idea i was the author of the day :-D

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