Life, Universe & ... · September 2, 2007 1

Loans – A benefit with caution

Loan & BankruptcyTaking a loan used to be a big issue once upon a time. It meant going through a lot of hassles and making rounds of the bank till the shoe-soles threatened to surrender. I remember, taking a loan was always a last ditch option for people, when we were kids. Once a loan was taken, it would be a cross to bear till it was paid up. That’s what we learnt while growing up.

Once I started working and was pretty much settled in, I started to see a very different picture. Every other bank started offering me a loan. Be it Personal Loans, Home Loans or Debt Consolidation Loans. In the beginning the banks would just call and tempt me to take a personal loan. Then they started sending people to my office. They would literally go down on their knees to convince me.

Debt Consolidation - No more credit card interests I was very surprised to learn that taking a loan is not all that difficult any more. In fact, its something that’s become a regular affair these days. People take loans to buy houses and lands. They again take loans keeping their properties as securities at the financial institutions to buy something else. These are called Secured Loans. There are loans available to furnish the new home, to buy a car, to spend on ones marriage and also to go on a vacation to Europe and USA with the family. Sometimes when there are too many loans and the interest rates are high and becomes difficult to maintain an easier option is a debt consolidation loan. Debt Consolidation offers an amount of money to pay off a part or the whole of all the loans and pay a much lower interest rate. The best part is that it becomes one EMI to pay instead of the headache of paying all the loans and credit cards.

The loan that we take can be paid off at leisure. It can be arranged with the institution as to when and how much will be paid off each month. The term can be anything between 6 months to 5 years. The EMI is fixed so as to make payments easy and hassle free. The banks even offer various services to pay off the EMI each month without having to make it a headache for the customer every month. It is either collected as a check from a given account or it can be an electronic payment. Payments can even be set up between an account and the loan so as to pay up a certain amount each month without further instructions.

Paperwork is fairly simple too. The documents required are usually the regular proofs of identity or residence. Most of the other documents are provided by the company that one works in or easy alternatives are available. A couple of photographs and a couple of signatures and the loan documentation is complete. Sometimes loans are also available for existing customers without any paperwork as long as one has a credit card.

Easy loans onlineBorrowing money has become a lot easier these days and so has the temptation to take a loan for no particular purpose. Most people take paying off loans very seriously. But unfortunately there is a group of people who have made ‘taking a loan’ a sport. They tend to avoid payments by closing accounts and leaving their jobs or cities altogether. They give customers a bad name. The financial institutions too are aware of these kinds of people. They can identify a genuine defaulter who might have missed a payment due to some problem and troublemakers who miss payments cause they do not intend to pay.

As a plea to all who take loans or plan to take a loan sometime in the future, make sure you pay back the money that you borrow. Just because a loan is so much easier these days doesn’t mean that you would borrow peoples money and not pay it back. Moreover, an unpaid loan is bad credit for the customer. In future you might be refused further loans, phone connections and petty loans to buy household items because you failed to pay back some money a long time ago. Be responsible.