Avoid Risky Loans!

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Desperate times require desperate measures. At some points in our lives, we get into difficult times and desperately seek out loans; thus, the source of the loan may not be important as to what we want to get off our hook.

An elder once told us (the youth fellowship) never to loan money out to relatives we could not afford to let go. Perhaps this can be further extended to friends and acquaintances as well. Usually, when we give loans, risky or not, they are to people we know relatively well or considerably well. Some loans are given as test loans," meaning you give the loan to test the borrower to see if he'll return it or not, and the amount is usually minimal and can be overlooked.

Soft loans are loans from family and friends that usually do not warrant any interest. Loans generally should have a duration, even if they are with friends. A good number of times, we get too compassionate to ask when the loan will be repaid, and occasionally, we are comfortable with a range of time rather than being specific. Money does not lie fallow; there's always a need for it or something we can do with it to add to the money, even if it'll be in a savings account or fixed deposit.

Risky Loans?
A loan already has its uncertainties, and risky loans imply slim chances of return. This could be a delayed return or even a denied return (meaning it may never be returned). It is generally advised to have a repayment plan for every loan we engage in. There's hardly any average individual that has not engaged in taking a loan at some point in life; however, care must be taken to avoid risks.

Less than two weeks ago, a very good and long-term friend of mine called me to request an urgent loan. Now, I truly did not have the amount he was asking for, which was huge. Permit me to say that I admire his efforts and struggles in life, but giving money to someone consistently does not help much for some people compared with them making their own money through jobs. He has been unemployed for a while, and most of our classmates know he fends for himself by asking for money, which we oblige when convenient, even though we hope he secures a job soon. I have borrowed him some amounts far less than the money he asked for recently, and it took him well past the deadline before he was able to return the loan. He told me he would return the recent loan in a week or two. When people are indefinite about when they'll return a loan, it is a sign that they have a poor repayment plan, and we must be wary of giving out such loans. He went further to implore me to ask my younger sister to borrow him the money, which I instantly refused. Considering many factors, even if I had the money, it was a risky loan, and I was very unwilling to engage in it.

Sometimes in March this year, a student needed to complete her tuition fee, and as much as I empathized with her, I needed to know her repayment plan, which was cloudy. She was the single child of a widow whose average income had been partially disclosed to me prior to that period. I suspected there was no concrete repayment plan, and so I asked her to try online loan apps. Crazy yeah? Well, desperate times require desperate measures. She came back to me after the attempt, stating that the amounts offered to her as a beginner were too little compared to what she required, which I had already thought of.

Online loan apps can be terrifying here in Nigeria, both in terms of exorbitant interest rates and the implications of defaults in payment. I offered to use my phone number to take the loan, for I had used that medium a few times in the past. I communicated the due date to her, and she promised to sort it out before then. What I didn't tell her was that I borrowed her the money from my personal account and only gave her the process (interest and due date) so she could be on her toes about returning the money.

Unfortunately for me, she defaulted as I envisaged, and that was when my car brake had issues, which I used a chunk of my salary to sort out. For some of us, calling several times to get our money back from those we loaned is not only very inconvenient but also unavoidable, and this was my situation with her. I did not know how she eventually got the money, about a week after the due date. Now, let me amuse you. She came back later to ask for another loan through the app. Much later, an online loan app circulated her picture with damaging messages about how she was a fraudster and many slanderous statements (typical of Nigerian loan apps). I was even called as one of her contacts, and I got pissed with the caller and even with her. She told me later on that she didn't engage with that loan app, but I had my reservations.

Well, our relationship was not as cordial as in times past after the incident. It's better to avoid risky loans.

Thank you for reading. I would love to have your comments and contributions.