Loans are a way of life for most people. Whether you are planning to buy a car, a house, or start a business, taking out a loan is usually the best option. They are an essential part of modern-day financial planning. Unfortunately, people alienate loans in Nigeria because of misinformation, lack of awareness, lack of exposure and close-mindedness.
In the hopes of setting the record straight, we will debunk the top 5 misconceptions about loans that you need to change.
6 Misconceptions about Loans You Need to Change
- Loans are bad
One of the biggest misconceptions about loans is that they are bad. This is far from the truth. While it is true that taking out a loan means that you will have to pay interest, loans can also be a valuable financial tool. For instance, taking out a loan to start a business can be a smart investment, especially if you have a solid business plan.
- You should pay off your loan as quickly as possible
While it is important to pay off your loan, paying it off too quickly can hurt your credit score. This is because credit bureaus like to see that you can handle debt responsibly over time. Instead of paying off your loan too quickly, it is better to make consistent payments over the life of the loan. At Renmoney, we offer flexible repayment periods between 3 – 24 months so you have ample time to prepare for your loans before they’re due and repay conveniently.
Read More: How do loans work?
- All Loans Have High-Interest Rates
Another common misconception about loans is that they always come with high-interest rates. While it’s true that some loans, such as payday loans or credit card cash advances, can have sky-high interest rates, there are plenty of other loan options available with reasonable interest rates. At Renmoney, we do well to offer a highly competitive interest rate so we’re easily accessible to the people that need us the most.
- Loans Are Only for Emergencies
Many people only consider taking out a loan when they’re in a financial emergency, such as a medical bill or car repair. There’s nothing wrong with that which is why we give instant loans of up to N200,000 for people with similar needs.
However, loans can also be used for planned expenses, such as home renovations or starting a small business. As long as you have a solid plan to repay the loan, taking out a loan for a planned expense can make financial sense.
- Loan Repayment Terms are set in Stone
Many people assume that loan repayment terms are set in stone and can’t be negotiated. However, that’s not always the case. If you’re having trouble making your loan payments, it’s worth reaching out to us to see if we can offer you a different repayment plan or deferment options.
- Loan platforms will embarrass you
We’ve seen just as many memes as you might have in recent times and we can imagine they’re still deterring you from taking loans. While other loan platforms might see the need to explore recovery options that are drastic, we pride ourselves in staying above the clutter. We respect our customers and preserving their integrity is a matter of utmost importance.
To avoid falling prey to loan myths, it’s important to do your research and understand your options before taking out a loan. Not every “fact” you see on social media is even factual.
Loans are there to give you convenience and financial growth so feel free to harness its unlimited possibilities when you have the need.