Should I Get a Loan? Understanding the Pros and Cons

Do you need quick cash? A catchy phrase that works quite well for everybody, especially when you are in need. This is where loan agencies enter the picture. The promise of quick cash is oh so inviting!

According to Enrich, a Hong Kong based NGO, 90 percent of Foreign Domestic workers struggle with debt. It is an alarming number, but when you are in desperate need, then you don’t have any other choice but to get a loan.

Earning a decent amount of income is the main reason for working abroad, however from the moment you start your job you are already in debt, because of the out of pocket expenses you have to shell out to work abroad.

So, let’s try to understand Loan Agencies better and how they operate.

Understanding Loan Agencies Better

  1. Loan Agencies promise easy cash and fast loan process.
  2. Some Loan Agencies don’t do background check.
  3. They just ask for a copy of your passport and contract as a proof of identity.
  4. They give non collateral loan
  5. Some Loan Agencies charge 60 percent interest that is way over the limit.
  6. Some Loan Agencies promise an interest as low as 99 %

The Outcome of Lending Money from Loan Agencies

There are only two end results in lending money from a loan agency; manage your finances easily and pay your debt or you can’t have both ends meet and struggle with your payment. So, what happens when you miss in paying the loan agencies?

  1. Once you miss a single payment they charge you with a high surcharge and penalties.
  2. The amount you need to pay doubles over 2 or three weeks that will leave you with a huge amount of debt.
  3. Once you miss a payment, they use terrifying tactics to force you to pay.
  4. Debt collectors will persistently call you at your employers’ home address.
  5. Verbal abuse is a common tactic they use to force you to pay your debt.
  6. Sometimes, they call your employer and threaten them until they are forced to help you.

These are just some of the known tactics they use, which can cause a lot of stress not only to you but also to your employer. It may be a desperate time that’s why you ended up making a deal with the loan agencies, but there are a lot of NGO’s that are willing to help and give you advice about your finances. It is better to think twice and know these things before you strike a deal with them.

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