Are Mobile App Loans Unhealthy for Borrowers?

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Chrispen

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Saturday, July 23, 2022 –Securing a loan from the comfort of your home has become so much easier than pulling a note from your own wallet.

This is because so many financial institutions and Apps have mushroomed with easy and quick offers dangled on everybody’s mobile phone.

Almost everybody nowadays relies on mobile loans to fund immediate needs; sometimes urgent needs like school fees, food and medical bills. The idea of online banking, an average thinker, may feel has increased revenue flow as well as strengthen the economy due to money availability and flow; but it is not.

An online loan is the easiest of all the loans to process and receive cash because it can take as few as 3-minutes and you are processed i.e cashed. This reason alone makes them reliable for borrowers.

All you need is to open an account with the loaning bank or App, do a few transactions here and there befoer you can start qualifying for various loan products step by step.

The highly talked about downside to this loaning method is that people tend to over-borrow and, in that process, this keeps them indebted throughout their lives. There is never a breathing space for those who are obsessed with such easy loans. So you remain in debts throughout, what is not a very healthy lifestyle for personal growth or financial freedom.

Loans come with interests rates and paying these interests every time is the same as losing money which otherwise could have helped do other things in your life.

More advantages of online loans include, speed, convenience, not collateral, flexibility and loan limits which is a clever way regulators use to shield the poor from over-borrowing beyond their means.

Due to limits, lenders also reduce credit risk i.e losing money lent to borrowers with high moral hazard or simply put, those who misuse money and fail or struggle to repay back.