If you desperately need money, will you borrow from the moneylender?
Thus, for this post, I am going to share my thought about borrowing from moneylenders.
The mushrooming of moneylenders
For the past few months, I have been receiving moneylenders name cards or brochures:
- on my car wipers
- stuck at my car window
- in the office pigeon hole
And recently, money lenders signboard has been mushrooming in my small town as well. Almost every month, I see new money lending companies been set up.
Personally, I am against this money lending business. Because money-lending indirectly encourages people to borrow and spend tomorrow’s money. In addition, the interest rate is usually very high.
To me, it’s really not worth it.
Why would someone borrow money from a moneylender?
Most people would know the risk and danger of borrowing money from a moneylender. Despite knowing this, there are still many who borrow money from moneylenders.
These could be the reasons:
1. Emergency business needs
Those who own a business would know that sometimes cash flow problems can happen. For example, you have an invoice going to be overdue soon. But, your debtor is delaying your payment.
You don’t want to delay your payment and you are confident that you will receive the payment from your debtor soon.
So, the fastest and easiest way to get the temporary fund is from the moneylender.
2. Emergency medical needs
Accidents and emergencies do happen. Sometimes, these can require a huge sum of money.
If you don’t have medical and health insurance, and you don’t have sufficient savings or credit cards, you might consider borrowing money from the moneylenders.
3. Emergency emotional needs
When someone is addicted and desperate for something and he is willing to risk anything including borrowing money from the money lenders, I call this emergency emotional needs.
That something can be:
- alcohol
- gambling
- drugs
- luxuries goods
When they run out of savings or while waiting for the next paycheck, the fastest and easiest way to fulfil their addiction is to borrow money from the moneylender.
The danger of borrowing from the moneylender
Not all who borrow from money lenders are those who didn’t manage their finances properly.
Usually, the main reason would be urgent and emergency needs. Because moneylender can provide the needed money quickly will less procedure.
And during a financial emergency, most probably the thought on how to pay back is not the main concern. The applicant will simply agree to the terms and conditions and sign the agreement.
Usually, the real problem comes when it is payback time:
- high-interest rate
- unclear terms and conditions
But, it is too late as he already signed the agreement earlier.
So, always remember to check properly before sign on any agreement.
Also, there is no free lunch in this world. You must pay back the amount borrowed with its interest.
Final thoughts
In my personal opinion, even though moneylenders can provide quick money, it is still safer to look for other alternatives such as a bank loan or borrow from family members.
If you are in a financial emergency and you really need the money, will you borrow from moneylenders?
