Running a small business, one fear that I have is that not only will my business venture fail, but that I would incur losses and fall into debt. My family has been in debt before and it took us a long time to settle that. This is one reason why I am always reluctant to take out loans.
A friend told me that he is thinking of getting a loan. I strongly discouraged him but did help him to compare loans online so that he will know what he will be getting into. If he is unable to service his loan, then the consequences are great.
When comparing loans, we looked into the annual interest rate, the total repayment amount as opposed to the amount borrowed and also penalty charges or any fees should he default his repayment.
I suggested that since the loan he plans to take out is not such a huge amount, I feel that he would be better off taking an overdraft but he is unsure if a loan is better than an overdraft.
For one, he is afraid that he bank may demand for a repayment at anytime, unlike a loan which comes with a repayment schedule. Moreover, the interest rates for overdrafts are even higher than rates for loans.
In my opinion, the best is to just live within our means.
A friend told me that he is thinking of getting a loan. I strongly discouraged him but did help him to compare loans online so that he will know what he will be getting into. If he is unable to service his loan, then the consequences are great.
When comparing loans, we looked into the annual interest rate, the total repayment amount as opposed to the amount borrowed and also penalty charges or any fees should he default his repayment.
I suggested that since the loan he plans to take out is not such a huge amount, I feel that he would be better off taking an overdraft but he is unsure if a loan is better than an overdraft.
For one, he is afraid that he bank may demand for a repayment at anytime, unlike a loan which comes with a repayment schedule. Moreover, the interest rates for overdrafts are even higher than rates for loans.
In my opinion, the best is to just live within our means.
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