Paying Back Loans – 3 Methods That Work For Me.

[justseyi]

Paying Back Loans – 3 Methods That Work For Me.

We all know what loans are, but for a lengthy article, I will get the definition of loans from… (drum roll) Investopedia. They say A loan is a form of debt incurred by an individual or other entity. The lender—is usually a corporation, financial institution, or government.

In Nigeria, before 2017 when you talk about loans to the average person what comes to their minds is, heaving to the bank with a bunch of identification documents and references and collateral. But that changed when loan apps like Pay Later (Carbon) and Branch came into the game, and in a few years everyone was simplifying loans and calling them ”soft loans”. From my experience, these 2 seem to be one of the decent ones among the hundreds that spring up every now and then.

Bad Eggs
When these loans companies walked into our lives, it felt like a child tasting ice cream for the first time, the only difference being this flavour comes with interest and harassing calls. On Twitter and Facebook, I have come across tons of debtors, now victims of these loan sharks. Yes, I said victims and this is why: these soft loan platforms offer you loans at reasonable interest rates (some aren’t) and in return, you give them access to your contacts and messages on your phone as a means of protecting themselves so when you default on your loans they can get their cashback.

What Do They Do With The Data?
Very simple they call your contacts and tell them you are a fraudster and you are on the run. They go ahead to tell this innocent contact of yours that they are liable to persecution if they don’t fish you out and pay back the loans they weren’t even aware of. So if you have a hypertensive parent you might not want to take loans from these lunatics or you will be spending a lifetime regretting. Back to their system getting back which you owe them, they also send out tons and tons of messages to your contacts, saying you defrauded them with a huge some and you are on the run. Mad right? I am hoping a serious clampdown can be done on these loan sharks but till then, here’s what I do to avoid such madness from happening.

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Don’t take loans and If you must, Don’t break the bank
It’s hard to see free money and say no, but if you can control your urges I’ll say don’t go for these loans at all, run from them and don’t look back. But as a coconut head like myself, if you are going to take out a loan, please use it for extreme emergencies and make sure it’s a loan your next paycheque can payback.

Stop postponing payment
It’s a terrible habit and you need to stop doing that, if you take a loan today and you get cash the next day, please pay back that loan. I have always felt the urge to postpone loan payments and I kind of think everyone else has that urge but I can tell you for a fact, it is a bad idea. If you don’t want to part with all you have at that moment the least you can do is pay half. But I’ll advise that you clear it all off so you can sleep better at night.

Pay in bits
This works for me well a lot. Let’s just say I take out a loan of N10,000 and repayment is 11,500 that is N1,500 interest in 28 days. What I do is every time cash comes into my hand I make a payment. I used to save my loan repayments till I realized I borrow from the piggy bank I deposited in. I mean loaning cash from yourself that is meant for a loan you took out. I order to avoid that, I make the repayments and that 500 or 1,000 naira deduction from my outstanding loan gives me so much joy.

 

Loans are not evil, in fact, they make life very easy for most of us but it is my humble opinion as stated in number one if you can do anything to avoid these loans apps like scaling your income but is not a bad idea if you fall back on these loans. Another method of avoiding the wrath of loan sharks is to solicit loans from friends and family to pay back these loans, but please endeavour to pay them back, it’s tough to part with money these days so no matter how small make sure you work on your repayment.

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