it

Should You Get a Personal Loan

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

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