How to Borrow Safely From Money Lenders This December

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There comes a time when what you have is not enough to cater for all your financial needs hence the need to seek external sources of funds to supplement what is left in your coffers. Economics will tell you that as a consumer your demands are insatiable. Even with all the money in the world, you cannot have everything you desire because both macroeconomic variables and microeconomic variables always get in the way.

For that reason it is always prudent to satisfy your most important need, then your desires can come in second depending on your expenditure. This festive season, the temptation to get a loan from your bank or digital loans could knock you off your feet. But before you commit to a loan that will see you suffer in January, here a few things that you should bear in mind.

1. Your short term needs come in first.

Short term loans are cheaper and do not require too much paperwork. The other option has a lot of red tapes and for someone looking to spend during this festive season, you might get frustrated. The advent of digital loans has made work easier for Kenyans to access credit, At the comfort of your smartphone, you can get a loan in a snap of a finger at an affordable interest rate. With short term needs one kinda has the discipline to borrow just enough for a particular project.

2. Borrow the right amount.

Moneylenders are not charitable organizations that will let you off the hook when you fail to service their loans. They are companies in the business of making money, and their terms and conditions are as binding as any legal contract can get. While you are about to be lured by the huge amounts these lenders are offering, you might want to think about the pain of repaying the principal amount plus the interest and what that will do to your finances. You don’t want to a big chunk of your salary slipping through your fingers in loan repayments.

3. Are you creditworthy?

While the answer to this question might be obvious, lenders will be quick to confirm with the Credit Reference Bureau of your history to match your words. How fast do you service your loans, what are the maximum amount you have borrowed before from any lenders and most probably the type of projects you engage in? By all means, money lenders will avoid, a risky borrow by charging hi very high-interest rate as compared to a safe borrower. You might want to be on their right-hand side.

4. Choose the right money lender

Price discrimination plays a role in the pricing policies adopted by a majority of these money lenders. There are so many registered companies in the business of lending money, all of which have cut a niche for themselves in the market. You must choose the right moneylender, the one who offers exactly what you need and his terms and conditions do not contain hidden clauses that could hurt your reputation as a borrower.

5. Be in line with your monthly budget

Most money lenders allow for the repayment of these loans in installments. That means your constrained financial resources might be squeezed a little more to accommodate this loan. This will inform you decision on how much you should borrow so that you don’t sweat your arse servicing it. Live within your means.

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Inzillia is an avid reader and researcher on matters finance, business, government affairs, culture, and human interest stories. Poetry too. Email: