7 things you should not borrow for in Nigeria

In present-day Nigeria, multitudes are being thrown into a financial dilemma courtesy of the invisible hand of inflation touching every sphere of our economy. But there’s one thing that has helped cushion the effect of our declining economic situation — responsible loans, not reckless borrowing (Over here, we totally frown upon reckless borrowing).

Whether it be from traditional lenders or financial institutions (banks et al), loans will be around for a long time. Despite the benefits of loans, there are certain things or reasons you should never consider loans for.

Let’s take a look at seven things you should not borrow for:

Borrowing money to splurge on luxury items, like expensive gadgets, designers, or extravagant vacations, is a very big no-no. We can agree that these items most likely offer short-lived satisfaction and contribute to long-term financial instability, especially for the trying-to-get Nigerian.

Relying on loanss for non-essential items strains your budget and may result in overwhelming debt. To avoid this, prioritize necessities over desires, set financial objectives, and save up for luxurious indulgences instead. By practicing financial discipline and avoiding reckless spending, you can clear the path to a more stable and comfortable financial future. Don’t impress the world to your detriment.

Impromptu buying with borrowed money is a common mistake a lot of people make with serious consequences. Impulse buying makes it difficult to stick to a budget and make well-informed choices.

The individual not only accumulates debt rapidly but is also burdened with repayment obligations and financial stress. To save oneself from this, practice self-control. Stick to your list, Stick to your budget and remember; There’s always rice at home. All of the above will help you curb overspending, and maintain a fine line between essential and non-essential expenses.

As a rule of thumb, before borrowing for a purchase, assess if it aligns with your long-term financial goals and if it’s truly necessary or just a fleeting desire.

Investing borrowed money in high-risk ventures can expose you to significant financial losses. While investments always carry some risk, using borrowed funds amplifies the potential consequences. Speculative stocks or unregulated schemes can wipe out borrowed capital, leaving you with debt and depleted finances.

Instead, opt for more stable investment options that match your risk tolerance and financial objectives. Seek advice from financial experts to make informed investment decisions. We’re no investment experts but we’re certain one of the foremost rules in the investment rule book is to never invest money you cannot afford to lose. Can you afford to lose a loan?

Using borrowed money for gambling or betting is a set-up for failure with a side dish of severe financial and personal consequences. The allure of quick cash can obscure the risk of significant losses, trapping you in a never-ending debt cycle.

Seek healthier and more stable ways to improve your finances. Consider seeking professional help if gambling has become problematic. Prioritize financial stability and emotional well-being over fleeting temptations.

Daily expenses are just that, daily expenses, you can’t cut them out of your life. Your transportation costs, groceries, utility bills, and many other essentials make up your necessary expenses. Using borrowed funds to cover these expenses is likely to trap an individual in a constant cycle of debt. It also suggests a deeper financial issue that needs urgent attention. It’s safer to get your money up (improve income) to cover these daily expenses than rely on loans.

Borrowing should be reserved for more significant investments or emergencies, not for day-to-day survival. Practicing financial discipline and living within your means can help evade unnecessary debt and foster better finances.

Using new loans to pay off existing debts might offer temporary relief but often worsens financial challenges in the long run. This practice makes it harder to manage other financial obligations.

Instead of paying debt with debt, consider debt consolidation options or negotiate with lenders to find a more manageable repayment term. Seek advice from financial experts who can guide you in developing a debt repayment strategy that aligns with your financial situation.

Weddings and ceremonies will last a day but the debt will last a lifetime. Well, not really but while celebrations are important, excessive spending on one-time events can hinder your financial goals.

The individual is better off with more budget-friendly options for weddings and ceremonies, focusing on the significance of the occasion rather than its extravagance. Planning and saving in advance helps prevent unnecessary debt and ensures greater financial security for your new chapter.

Remember, the success of marriage should not be tied to the scale of the celebration but to the love and commitment between partners. Wisdom nugget eh?

Now that we’ve told you several things you should not be taking out a loan for, we’re certain you’ve got your priorities in order and can now confidently apply for a loan with reasonable end-use.

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