It is easy for me to say ‘you should not take personal loans, because I have not taken’.
It is so foolish too say do not borrow. Most people are borrowing out of compulsion, not love for the bank!!
Nobody borrows if they can live without that expense. However people do borrow, and when I spoke to a few of the kids who had borrowed and a couple of bankers…here is what I got as the reasons for borrowing (and I am not including a boy who took a personal loan of Rs. 25000 for getting a tatoo done – I am happy, the tatoo shop owner is a friend!!).
1. For a major repair in their vehicle: Vehicle meets with an accident (worse, vehicle belongs to the boss!) so the P L goes towards repair costs.
2. For a medical emergency: actually could be any emergency, but 3 people said medical emergency. The medical emergency could happen to self, friend, parents, sibling,….does not matter.
3. To repay more pressing loans: if they have borrowed from some friend, relative or a money lender who can press them hard, then the bank P L becomes necessary to repay the original loan.
4. To meet expenses arising out of death: Some people spend a lot on death related ceremonies and have no clue from where to meet those expenses, so immediately it is a P L.
5. To buy a luxury item – could be a plasma tv, a vacation, a family trip to ‘native place’…literally anything.
6. For spending on a festival: Ganesh chathurthi for one! Or it could be to meet expenses related to marriage, child birth, …again anything! This need not be in their own house – it could be in a friends house too! Lots of trust!
I normally do not write about loans…but just read it a couple of times – do you see any NEED for a loan?
For things which you know, you do a SIP…for an emergency you insure. Tell me why do these people need to borrow?
JUST a little willingness to postpone consumption, a medical and life insurance, …..would actually mean,….no P L was necessary! Just a point of view….
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