Top 10 Reasons why you should Never Take Loan

Loans provide great help to buy or use things which you cannot afford with your own money, however, loans can only prove out to be beneficial for those who already have money to enjoy the luxuries of life whereas the mediocre people may suffer a lot due to high interest rates and psychological strain. There are many disadvantages of loans which put a big question mark on its utilisation. Therefore, you should avoid taking up loans which you cannot pay in order to avoid any mental torture or loss to your reputation.

Instructions

  • 1

    High interest rate

    The interest rates on loans keep on rising with inflation in the economy. Although, the central banks are very much involved in controlling the interest rates, but sometimes they also have to take drastic measures to control the economy because of which consumers suffer a lot.

  • 2

    Unpredictability

    It is very hard to make predictions about the future. Even though, you can control the internal factors which may affect your business income, but you cannot control the external factors like socio-economical changes which may have a bad impact on the overall business activities in the state. In such cases, you may become unable to repay your loan.

  • 3

    Mental pressure

    If you take up a loan from a bank or any other lending institution, you will always have a mental pressure to repay it which can eventually cause a psychological strain on your mind.

  • 4

    Chances of bankruptcy

    If you are unable to pay your loans due to any reason, the bank can file for your bankruptcy in the court to get back its money.

  • 5

    Not good for reputation

    Usually, the people who take up huge loans have bad reputation in business class. Furthermore, if you fail to repay your loan, you will eventually loss your respect in the society.

  • 6

    No savings

    When all your money goes to pay huge interest and repayment of the principal amount on loans, you don’t have money to save.

  • 7

    Dependency

    If you have taken loans from the bank, you become dependent on the amount of the loan rather than on your own resources.

  • 8

    Irretrievable Trap

    Sometimes, in order to pay off an existing loan, you take up more loans due to which you may find yourself in an irretrievable trap.

  • 9

    Inability to move forward

    If you are surrounded by huge amount of loans, you become unable to move forward in your life.

  • 10

    Loss of trust

    When you are under the burden of repayment of loans, the people lose trust in you.

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