Everyone faces hard times, and problems that seem to be more than our abilities always seem to overwhelm us. In these times, we’re easily tempted into believing that a loan is exactly what we need to get our feet off the ground. While in some cases, this might really be the case, there are other cases where a loan should not even be on the list of considerable options. But how do you know if it’s appropriate for you to get a loan or if you need to think about a new way of generating income? Here are the top six reasons why you should not get a loan.
- You’re underage.
If you’re below 18, then there’s no need that could be so pressing that you can’t wait for a few years. Banks do not give loans to people less than 18 years, because they believe such people do not have the ability to pay back at that time. Although, in present times, this is no longer so true as teenagers are finding legal and creative ways of earning millions. Irrespective, as a teenager, a loan is the last thing you need. You do not want to fill your future with debts and credits when you’ve barely started living.
- You don’t have a stable income.
Anyone who does not have a stable income is rightly disqualified by banks from getting a loan. This is because if you do not yet have a stable means of earning money, how could you hope to pay back the loan you seek to take out? If one has no stable income, what such a person needs is to find reliable and legal ways of making money, rather than a loan.
A person without a job taking a loan will have the amount in that person’s bank account reading in negatives. This means that even if the person is lucky to receive any money from some other source, that money would not belong to the individual. This person wouldn’t have the means of paying back and would live in constant fear. If you’re unemployed, seek a reasonably paying job. Do not seek a loan.
- You’re highly unsure about the potential of your start-up.
The number one person who should believe in your start-up idea is you. But if you can’t bring yourself to believe that the idea is truly worth a shot, then do not take a loan. If you could not possibly imagine how the start-up could pay back the loan in a few months, then do not take out the loan. This doesn’t mean that your idea is a bad one or anything along this line; rather, it means that you need to take a little time off to get ready for this loan.
You need to find reasons to believe in your start-up, and after finding reasons, you need to find people you can convince. The psychology is that if you’re able to convince at least three different people on why your start-up is worthy of a loan, then not only will you be able to convince the bank, but you’ll also be able to stick to your commitment.
- You just want to acquire a luxury.
If the only reason you want to get a loan is that you want to acquire an expensive car or the latest phone in town, then discard that thought. Someone once said that if you cannot afford to pay for something twice, then you simply cannot afford it. People have been embarrassed, disgraced, and dragged on social media just because they were trying to be something that they’re not. If you cannot afford it, do not give yourself undue pressure. You’ll get the luxury when you attain that financial status.
- You don’t even know why you need the loan.
Sometimes, people feel like a loan is the only thing that can take their problems away, but as soon as you ask them why exactly they need a loan, they’re unable to provide you with a specific answer. The same also goes for when you ask them what they plan to do with the loan and how they plan to pay it back. They usually just beat about the bush, telling you all the problems they’re tired of tackling.
When the purpose of a thing is unknown, abuse becomes inevitable. If you do not know why you need a loan or what you can do to earn the money back in a limited amount of time, then a loan is the last thing you need.
- You’re getting it on someone else’s behalf.
It could be a friend or a family member, but it goes without saying that if this person is unable to take out a loan, then it’s probably because they shouldn’t. Sometimes, people might implore you to take out loans on their behalf because they already owe so many people, and no one is willing to give them any more loans. While you might be credible, no matter who the person is, you should never take out a loan on another person’s behalf. You know you won’t go into hiding, but how do you know that the person in question won’t do just this.
Loans are delicate facilities capable of either making or marring a man. Don’t take a loan if it’s beyond your reach. Don’t force yourself to take out a loan if you can’t think of why you need the loan, or how you can pay it back. If, however, you’re above these reasons and you’re sure of at least two ways of paying back the loan, then by all means go ahead.