Of debts and loans

November 25, 2009

One of the traits that I truly detest but I know I am guilty of is “Keeping up with the Jones”. That mentality is also evident in most people as well. We desire what others have and we want to get it as well using whatever means we have. Because of this unhealthy desire for material goods, sometimes, people tend to live way beyond their means and borrow money from other people even at such exorbitant interest rate.

 

And it doesn’t stop there. The more we fuel our penchant for whatever our neighbors have, the more we are digging ourselves into deeper and bigger debts. There are so many means where you could borrow money in no time and with less hassles.

 

Interest rates vary. For banks, they usually charge between 8% to 16% interest per annum. Your friendly coworker’s rate is much steeper at 5% to 20% per month but with fewer requirements than banks. They usually will just get your payroll ATM as collateral.

 

They’ll earn more when amortizations are delayed! Your original loan of say, 10k will balloon to 25k by the time you are done with your term and it doesn’t stop there. Sometimes, you will borrow from Tom to pay whatever you owe Dick and before you know it, you’d be dreading pay days since it means debating who to pay first.  

 

If you owe your officemates and you do not have the resources to pay them, the best that you can do is to always avoid them. That would be feasible if your office is quite big with a lot of employees but how about in very small office where everybody knows about everybody else’s business? Would you have your colleagues talk behind your back about your bad credits?

 

I guess it would be easier to ignore banks and lending institutions since you wouldn’t be dealing with them often. However, they play hard ball. Before you will be able to get a loan from them, you’d be signing a lot of papers with them which they will use as evidence when they serve you with demand letters and even worse, sue you for non-payment of loans. Others would publicly humiliate you and publish your picture in leading newspapers. You’ll have your name blackballed in their portal. Banks and Lending Institutions have this association and they tell each other if one person is a credit risk or not.

 

Be thankful if you’re not yet neck deep in debts. It always pays to live below your means. Also whatever your neighbor has today will be yesterday’s news by the time you purchase it.