Mistakes to avoid when applying for online/MoMo loans in Ghana

Loans aren’t always a bad idea if you go about it right. As a businessman, taking a loan could be one of the best decisions for it.

The problem is that many business owners don’t know how to go about it when applying for a loan. While physical loan applications at banks are time-consuming and full of procedures and on top of that stressful, online applications are far easier.

Technology has presented us with several online platforms to submit loan applications. Financial mistakes almost always end up costing you money, so I’ll discuss with you a few mistakes to avoid when next you apply for a loan online.

Don’t settle for a high interest rate

Fees, terms & conditions, and other extras are all well and good, but no matter how nice they sound, you should never settle for a high-interest rate. There’s just no need! And yet, it can be all too easy to lose sight of the rate you’re going to end up paying.

When looking for a loan, consider what you’ll be using it for. Maybe you’ll be putting it towards getting your license to start a car business. Once you know what you’ll be spending it on, you can track down a loan that fits the bill and still offers a great rate.

You don’t repay the loan on time

The loan process doesn’t end once you’ve been given the money. At a given specific time, you’re going to have to pay the money back. It might sound simple, but you’ll be surprised at how the days will go by and easy it will be to forget that you have a loan to repay.

This mistake is especially common if this is your first time applying for a loan. While a seemingly harmless mistake, but it could adversely affect your credit score and your chances of landing another loan in the future. 

Mark payment dates in your calendar, throw a reminder on your phone, or better yet, set up an automatic transfer via online banking so that the payments take care of themselves. It’s that simple!

Consider your budget

What are you planning on using this money for – Paying off medical bills? A loan may help you out of a rough financial situation, but it also leaves you with outstanding debt and interest to repay.

But it can be all too easy to get caught up in the loan pre-approval process and find that you haven’t asked – or answered – the most important question of all: will you be able to repay it. You shouldn’t take loans you can’t be able to pay back just because you can take the loan.

Consider MTN quick loan; for instance, taking a loan as fast as that can offer you exciting possibilities to take care of whatever you’ve got.

But borrowing more money than you can afford can quickly see your expenses getting out of hand, which is the last thing you want. Instead, check your budget, add the repayments, and run the numbers. If the application is successful, will you be struggling to keep your head above water? Or will you be able to manage it easily?

Make such calculations and ask yourself those questions and decide if you need to take that loan.

Ideally, any personal loan repayments shouldn’t come to more than 15-25% of your income. If it’s more than that, it might be time to consider other ways you can get the money together. Perhaps you could find ways to save a little cash. 

Don’t apply for loans from multiple online sources

As easy as taking a loan sounds, you shouldn’t take multiple ones at a time.

Because even if you take them within a three-day space, it’s still going to be a problem for you when it’s time for you to pay. A business person might argue that the business that he’s going to operate with loans will pay off so he can pay back from loans on time.

But that’s not true why because even if you’re a salary earner, taking two loans from two online platforms can be very hard on you when you pay back with your salary money. You might end not paying on time because you’ll be contemplating using the money on something else, and that’s going to attract penalties. For instance, there are a couple of online loan platforms in ghana, like Mtn quick loan, Fido money loans and Vodafone loans which was recently introduced.

Taking loans from MTN quick loan is very simple; you have to follow a few prompts, and you’re done. The same applies to the other loan platforms, so the simplicity might tempt you to apply from all three agencies because you can, but that can cause serious financial problems soon.

Thinking you can take the loan and refuse to pay

Most people think because the loans are applied and not in person, they can run away with the money, but they’re wrong. This is because they apply for the loan with your details and these agencies have access to your details, which they can use to trace you.

Some of these agencies online even make you add a guarantee’s number in the unlikely event that they don’t hear from you. And some people don’t inform the people whose details so when the time for the money comes, and the agencies start calling them, they’ll also be frustrated and give away your location.

By then, you would’ve incurred a lot of penalties on top of the initial interest, which I’m not sure you thought of when you planned to run away with the money. So basic ideal thing you have to do is take a loan you can afford to pay and make payback at the right time to avoid penalties that you can avoid.

Conclusion

Ever since being introduced, online and Mobile Money loans have helped pay fees for students, starting a small scale business amongst others, but for some, it has become a devil to them rather than the angel it is.

And that’s because they made some mistakes they could’ve avoided, so read through this piece of work and learn some mistakes to avoid when applying for online loans in Ghana.