It is better to avoid a loan all together and if you need a personal loan, it is already too late. The interest rates that these companies charge is outrageous and is often times many multiples of credit card interest rates. You are often at a lower credit score range when you need such a loan and this compound the amount of interest you pay due to the higher interest rate they charge you.
How’s it going everybody this is beat the bush look don’t ever get a personal loan some people might get in a bind of money problems and then they say they absolutely need it of course when you absolutely need it it’s already too late i equate this a kind of like surgery because it’s kind of like the last resort right before actually needing surgery you could have
Done all this things to improve your health before you actually even need it so same thing in this situation before you even need to take out a loan that comes out to be like 150% apr you could have done all these things who try to not spend as much you could try to earn more all kinds of different things before you actually get in a bind where you you know you
Essentially run out of money once you start taking out a personal loan it’s sort of like a drug you take it yeah you know maybe that first day first couple of days it would be very fine everything is nice and all because you’re able to meet your obligations but the two or three years after that you’re gonna have to make payments on this and the aggregate of this
Is going to be 10 times more roughly of what you initially borrowed frankly i’m surprised that these companies are around i was driving the other day and i heard one of the commercials on the radio i’m like what you can borrow $2,600 or something no collateral and then they make it sound like it’s really really cheap they go oh you only have to pay back like $13
A day but when you really calculate the payments here you’re paying over 100 percent apr and you know over on this channel i complain when it’s like 5% apr or 8% a pr 100 okay if they have companies out there where i need to get a job or something and then the main product of this company would be these personal loans with really really large aprs i would frankly
Be very ashamed of myself in working for these companies i believe these companies should not exist at all because once they’re there they’re sort of like tempting you to borrow a lot of money they’re essentially a loan shark because once you borrow it well you’re gonna have to keep on paying them back well if you don’t pay them back you’re essentially getting to
Get bad credit they don’t go as far as loan shark where they’re gonna chop off of pinky or something so in a way you know it’s close to that anyhow i think most of you guys that are watching this channel is probably not gonna go towards getting a personal loan but in the comments section sometimes i hear people ask me hey should i get a personal loan to try and
Consolidate our debt or something so there are people out there that are thinking of using this as sort of like a tool to consolidate and that’s another point here because they spin it in such a way that they go oh yeah you know you can take out this personal loan and then you can consolidate your debts but if you do this is you’re essentially gonna pay much much
More than if you’re taking it out from a credit card because if you take out a personal loan at a hundred percent one hundred fifty percent apr and then you pay into a lower apr interest rate in a credit card let’s say it’s twenty five percent then you’re taking out a loan with a greater interest rate for some reason to pay off a lower interest rate and this is not
Something that you should be doing now let me go over an example of what one of these personal loans look like you can get one of these personal loans through online or like i said you know you can hear it on the radio and then they go oh yeah you know 1-800 whatever and call them up and then they’re gonna loan you money they’re gonna wire it right to your bank
And then you’re gonna get your money so over here is an example i went to one of these websites and i pulled up the terms of these things and i’m just flabbergasted at how terrible they are i cannot believe they can even put this down on paper and ask people to pay for this they should be ashamed of themselves the amount is $2,600 that you can borrow pay means 42
Payments every single payment amount is two hundred eighty one dollars every single month okay so a roughly ten months later you’re gonna pay enough to be able to pay off the initial principle that you borrowed but then you have thirty two payments to make before you pay off the full loan this is how bad the terms are the total finance charges now most of these
Places is not going to tell you what the total finance charge is i have to drill down pretty deep or you have to calculate yourself and most people that are going to borrow this kind of loans is not you know gonna go and open up a spreadsheet and you know do their calculations this way the total payments that you end up paying is eleven thousand eight hundred and
Five dollars you borrow 2,600 you pay back 11,000 i don’t know what to say about this because you only get 2600 okay today and then later on you pay 11,000 something this is so many many multiples of what you actually get so imagine instead of using $2,600 you know you’re paying off some debt or something and all of a sudden that debt is not $2,600 it’s $11,000
Why would anyone do this well you because you might be in a bond because you have zero dollars in the bank and somehow you got a lien on this and go oh i have no money at all i need you know a suddent chunk of money so that you can spend it but once you do this it’s kind of like a drug okay whatever drug there is but once you taste the first thing right you get
Addicted except there’s no addiction here you take the first one you know you can’t go and get more and more loans or something because once you get the first one they’re gonna realize oh yeah you took out alone they’re not gonna loan you anymore until you pay this one off and then you got this long painful withdrawal thing for 42 months where you have to keep
On paying $281 out of your paycheck how do you prevent this you try to not get in in the first place so hopefully you’re watching this video before you actually need a personal loan if you’re like a month or two before you actually need one then you know there’s still some things that you can do to try to not spend any money and try to use whatever that you’re
Actually making and and pay off whatever obligations that you already have there’s an origination fee of $75 so instead of getting twenty six hundred dollars you get twenty five hundred twenty-five dollars they’re late fee is zero i don’t know what that means if you’re late they’re probably just going to hand you off to some collection and then they’re gonna come
In hassle you every single week every single day probably you don’t want that happening early pay off free $0 the the equivalent apr of this thing okay they don’t usually try to tell you what the apr is but the equivalent apr like i said it’s a hundred percent 150% but this example is 132 percent apr this is way better than you know if you use a credit card you
Know credit card might be like 32 percent or something you know at most at a hundred thirty two percent wow is this is this a joke this means every single month is 11 percent apr now some places charge 11 percent apr in one year but in said one single month you end up paying 11 percent interest per month if it’s 11 percent is 286 dollars it’s roughly the same
Amount as the payment amount now there’s a little discrepancy here because when i calculate it myself is 286 dollars their monthly payment is two hundred eighty one dollars so it’s a little bit more i’m not sure what’s going on here but note that they designed it in such a way that initially you’re paying almost next to nothing they’re charging you a really huge
Apr and then they don’t want you to pay off the principal at all so they want you to drag this on for as long as possible and if they have their way they want you to pay for a lifetime oh you know let us loan you two thousand six hundred dollars but you know for the rest of your life pay us two hundred eighty dollars every single month for the rest of your life
You know that’s a pretty good deal i would like to lend that to other people but you know i probably you know cannot live with myself if i have to do such a thing now let’s talk about how to prevent this i know this is kind of short i have a lot of other videos that designed ways to improve your cash flow look up that cash flow video that would help a lot it’s a
Little bit longer than what i’m describing here basically you need to manage your spending a lot of people they have a whole bunch of set of stuff that they think they need but in reality there are tips and tricks on learning how to not really even buy into those things because sometimes you go and go oh i need to buy certain things i need to spend a certain amount
Of money for food if you go eat out fast food all the time well you know every single meal every single day maybe it might cost you $20 but did you guys know i only need to spend like four dollars or something every single day for my food you know make your own food from fresh ingredients don’t buy any of the packaged stuff and also so right there you reduce your
Daily expenditure for food and you save a whole ton of money i don’t even pay for a cell phone plan and yet i’m able to use a cell phone i’ve gone over this multiple times before and i’ll leave a link over there and basically there’s a lot of things that you can do to reduce your expenses as long as you’re still sort of working whatever job you are okay you just
Gotta make sure that you spend less than that whatever that you make and the methods go on and on including your housing you might be able to reduce that by living with more roommates sometimes that’s not feasible or sometimes maybe you don’t like such a thing well if you’re in such a bind you really have to look really hard at what things that you require if i
Have $0 to pay a certain thing and i need $2,600 okay let’s say you know i start off blank and i you know really need to borrow this personal loan i would rather not eat for a day then borrow into this because it would mean getting myself into that much more trouble and knowing that you’re spending 4 times your future money to pay off whatever money that you owe
Right now should be enough deterrent to you know just do whatever you can not even take the loan so whatever it is suffer the consequences now instead of paying four times the amount later i hope this convinced you to take a hard look at your finances before you even consider a personal loan basically stay away from it as much as you can if you are doing it already
It’s already too late this is my channel t-shirt honey badger icon it says infinite occation but if you’re about to get a personal loan or you’re in financial trouble don’t worry about this don’t get a t-shirt okay if you’re interested in seeing more of my videos push that subscribe button and ring that bell icon to get notifications thanks for watching
Transcribed from video
Should You Get a Personal Loan By BeatTheBush