The convenience provided by private online lending is often misused by the public. While it may be used for emergency purposes, but avoid applying for a personal online loan for the purposes listed below!
Personal online lending has often been a topic of intense discussion across the media as it is identically used as an emergency fund to be used when we are in an emergency situation. The popularity of personal online loans cannot be underestimated. Online loans are one form of online lending provided by fintech companies. You can submit it through the website or downloadable app on the PlayStore.
The popularity of this personal online loan is unmatched by the variety of facilities it offers. You do not need to invest or guarantee valuable assets in order to obtain a loan. With only a National ID (Tax ID), a Personal Identification Number, and having a savings account, you can already lend money online using your cell phone and internet network. Because you do not use the guarantee and the terms are not met, personal online loan funds can be liquid in just 1-3 business days.
While online loans can generally be used as an emergency fund, there are several requirements to avoid using a personal online loan, namely:
Cash For Buying Vehicles
The first requirement is for the down payment of the vehicle. For many, owning a vehicle is no longer a necessity, but it is now turning into a prestige or prestige. You must have seen a lot of younger generations switch cars with the latest models because they didn’t want to lose to their friends’ vehicles.
When applying for a car loan to a bank or mortgage company , you will usually be required to pay a down payment as a token. If the vehicle purchased is a two-wheel-drive vehicle, then the amount of cash is not much, but what about a four-wheel-drive vehicle? Selling cars in the tens to hundreds of millions of dollars makes you have to pay a small amount in advance. With less money available, people will usually take out a personal online loan for an additional down payment. It’s not like this is highly recommended. Why is that?
When we take out a motor vehicle credit, there is definitely a monthly installment. If we also take out a personal online loan for a down payment, then the number of funds needed to pay off the installment increases so that your debt goes up several times. It is advisable that if your down payment is not yet collected, first consider the intention to obtain a motor vehicle credit.
DP Extension Buying a Home
The same goes for DP ( down payment ) when you buy a house. Home prices are so high that we often delay buying a home. One way to buy a dream home is with a Mortgage (Mortgage Credit). But one of the conditions for applying for a mortgage is to give the DP money first. This DP amount is about 10-25% of the house price. So if the selling price of the house you want to buy is $ 300,000, then the DP money you need to make will be $ 30,000 to $ 75,000. The numbers are quite a large right?
No wonder there are people who lend personal loans online to supplement DP money to buy a home. By taking out a personal online loan, you will automatically pay off two installments, namely a personal online mortgage loan and a mortgage loan. This small debt burden will certainly be very risky for you. Wrong, if you can’t pay for one, you could lose the house you bought.
Paying Credit Card Debt
You must know the term digging a hole. This term is defined as one who is indebted to cover or pay off his debts. This sense is highly discouraged by financial experts because you will always have a debt to repay later. These unpaid debts are often used by credit card users. Those who can’t control themselves are using credit cards beyond their capabilities so even the credit card debt stack is shrinking.
Since banks continue to charge because the payment is due, people will usually take out a personal online loan to pay off their credit card billing charges. This kind of behavior is not wise because you really only want to take shortcuts. Please note that even if you have already paid off your credit card debt installment, there is still a personal online loan installment you have to pay. If you can’t pay the installment again, are you going to dig the hole again?
Therefore, if you have a credit card, use it wisely and always be aware of your financial limitations so as to avoid excessive credit card usage. If necessary before using it, you have already made a calculation in advance so that the installment can be paid on time.
There are also people who apply for personal online loans to meet their daily needs such as kitchen shopping, transportation to work, home rent, electricity payments, and even telephone bills. The decision to use the funds from a personal online loan is highly discouraged because, in order to pay for your daily needs, you must already have a fundraiser that comes with a monthly income or salary.
Rather than taking a loan online , it is best to carefully calculate the monthly income you have for your daily needs. Prioritizing basic necessities such as paying rent, electricity, and kitchen expenses. If there are still leftovers, then you can use them for other needs. That way, your income can meet your daily needs so you don’t have to apply for a personal online loan.
Applying for a personal online loan for shopping needs is not recommended as it can lead you to a hectic life of hedonism. Just imagine you are satisfied after shopping items that you want, will have to pay the mortgage debt personal loan online each month. If your monthly income is enough to pay off the debt installment, but what if your paycheck doesn’t have much left to pay for your personal online loan debt installment because you already use it for shopping ?
Just because you want to, you can get rid of debt by buying less important things. So it is advisable to make your intention of applying for a personal loan online only for shopping .
Use personal online loans only for important needs
If used properly and on purpose, personal online loans can be the type of loan that can help you. So in what situations can we use a personal online loan? You can use personal online loans for production needs.
Let’s say in addition to venture capital, buying gadgets for online business, and so on. Personal online loans can also be used for emergency needs such as paying for hospital expenses, education expenses, and even hospitalization.