When you should not take microloans — Top 5 cases

Once in a difficult life situation, a person often thinks about a quick and easy way to get money. In such cases, you can resort to a loan in a microfinance organization. This method will require a minimum of time and papers from the borrower.


Basically, such organizations are treated by citizens when they are in critical situations, and they have no time to contact the bank. Obtaining fast and easy money seems to be an ideal solution, and in a difficult moment it is a real faithful tool. However, you should never forget about caution of cooperation with similar organizations.

There are cases when the microloave is not recommended to take to avoid negative consequences.

If the organization causes you doubt better to give preference to those who have a numerous number of reviews and everyone for hearing. If, when making a loan, you were embarrassed that the specialist did not explain to you in full condition of the contract, then you should not apply to this office, as it is possible that it works illegally.

You can verify whether the organization works on legal conditions by requesting in the registry of all IFRs, also ask for documents, including a license in the organization itself. And most importantly, do not forget to carefully examine the terms of the contract.

Everyone knows that interest on microloans is much higher than in ordinary banks. And in the event that you hold the payments, fines and penalties can be added to them. If you are not fully sure that you can repay the amount taken on time, it is better to give up the microloan, otherwise you will get overpass more than 400%.

Register in the MFI only the amount that is guaranteed to get in the near future and can repay.

If you have a situation when you want to arrange a microloan to repay the current debt — not a very good idea. Some debts will pull others and copy as a snowball. It is necessary to reconsider your attitude towards money in the near future and choose another solution to the problem, otherwise it may be sooner or later it can walk to collectors or ships.

This does not include situations when you need funds for treatment, or on the need of essentials. It says about things when a person decides to arrange microloans in order to purchase a dear TV, a decoration or a fur coat. Often it does not work in time to allocate the necessary amount, and the loan is either repaid very slowly, or is not repaid at all. And when the interest and fines begin to run away and does not seem so necessary.

In order to make a microloan, think that your investments will not give you any guarantees and will not be erroneous. In case you are confident in your abilities, it is better to use a bank loan on more favorable terms.

It is also worth noting that often the MFIs are asked to specify the goal of lending, and it may be that if your goal is to be the goal of a senseless or knowingly losing — you may refuse the loan.

We hope that our article was useful for you.