I have seen successful people, and yet they still take loans when needed to expand their businesses the more, getting richer—, indeed a smart approach. This is to tell you that loans can't be all that bad provided that you did your math well and channeled the loan rightly.
When I worked with my former boss as his admin assistant, I watched this man apply for a loan worth millions of naira to run a project he got with a company in the USA. Personally, I was afraid on his behalf while I was documenting the whole loan stuff, and then I asked him, Why taking this huge loan, sir? What if things go wrong with the project? How do you plan to pay back this huge money? And then he smiled and said, One can go wrong with loans, and that's true, but it makes sense to take a loan for a business you have been into with lots of experience and not take a loan for a new business in which you are uncertain of the outcome of the business. He went further to explain to me that it's the reason why most people take a loan for their business and find it difficult to repay the loan. His response alone was a nice lesson I learned about the principles of loan.
Money is essential for humans; unfortunately, not everyone has the financial capability to sort out their financial needs either for emergencies or business at a point in time, and that's why you see some people taking loans with the plan of repaying them within a specific time. I have taken a loan in the past to fix an emergency, and I can say that it worked well for me.
One of my biggest fears about taking loans has been the repayment part. The fear of not meeting up is capable of giving me sleepless nights, and that's why, even for most of my business ideas, I find it difficult to take a loan. However, the time I had an emergency to fix, it was a matter of life and death, and only money could save the life of my husband at that time. I didn't want to waste time asking any of my relatives to borrow me money. I went straight to my bank app and quickly applied for the loan. Within a few minutes, the money was credited into my account with a twelve-month repayment plan. I don't know what would have befallen my husband if I hadn't taken such quick action, but till date, that loan still stands as a good course for me. It was my first ever time taking a loan; I was still working as an admin assistant then, and that gave me the opportunity to use my salary as a repayment tool.
I was able to spread the repayment over a period of 12 months with an increased interest rate anyway, but it was a bit convenient that way. Once my salary is coming, the bank deducts a certain percentage from the loan and credits me with the balance. That was a nice strategy I used, and before I knew it, I was done with repayment. I felt better and more peaceful for standing on the gap to save the life of my husband through that single loan. The issue that brought about the loan served as a life lesson to us till date.
Wrapping up, either for business or to fix an emergency, a loan can be a good rescue, provided you channel the money in the right place and not for liabilities.
This is my response to the #hivelearners community contest on the topic titled, The Good Loan.
Images were taken from canva