The High Cost of Money

Before borrowing money from a friend, decide which you need more.

In The Merchant of Venice Shakespeare explores the dangers of borrowing money, and in Hamlet, Shakespeare says; ‘neither a borrower nor a lender be…..’  And, especially think twice, and twice again before borrowing money from a friend.  Think about what you need the most ~ the friendship or the money, for money is often the cause of acrimony and breakups of even the closest of relationships.  Your friend may not charge you financial interest on the sums you borrow, but there are likely to be charges and obligations other than strictly monetary.

In order of the least to most desirable lenders from whom you could think of approaching are;

  • Friends and lovers.  Borrow from a friend and be prepared to soon lose a friend.
  • Parents and family.
  • Payday Lenders, who will charge you usuary rates of interest ~ 250% to over 1,000% per annum.
  • Guarantor Lenders.  If you have a poor credit rating you could get a friend or family member to guarantee your loan.  These are doubly bad, with all the disadvantages of actually borrowing from friends, lovers, parents and family ~ plus very high rates of interest 50% per annum being about the norm.
  • Credit card debt.  These insidious borrowings can cost you 25% or more over a year ~ if you go on using that card you may never be debt free.
  • Bank loans.  If your bank will lend you money you may expect to pay a low rate of interest, maybe between 3% and 10% per annum.
  • Mortgages and other secured loans from your bank or a  mortgage company / broker.  Personally, I could get a mortgage at 2% per annum.
  • Car loans.  If you should want to buy a new car, many dealers will offer you a car loan at 0%.

And, why do you want a loan anyhow?  The very worst reason for borrowing is to feed your addiction; gambling, drugs, booze, sex…. and the second worst reason for borrowing money is to pay off another debt.  Both of those are likely to get you into deeper and even worse trouble.  Maybe the only good reasons for  borrowing are to buy a home, or car,  (or in some places to pay medical fees).  Vacations, wide-screen TVs, plush furniture,  jewellery, fancy clothes, expensive shoes, are all not worth getting yourself into debt for.

So, just beware of borrowing anything from anyone.

Some say a fool and his money are soon parted.  And that a man in love never counts the cost of anything.  All I know is that Shakespeare was a pretty smart guy.

~

Jack Collier

jackcollier7@ talktalk.net

Maybe a convertible Mustang isn’t the most prudent purchase.

3 responses

  1. I have been a debt collection manager for many years I can only agree with this clever post🤓

    Liked by 1 person

    1. Thanks. I was in banking for many, many years. 😎

      Liked by 1 person

      1. So you know😱I still have a representative of the financial services at home🙄but that’s fine he allows me to write nearly full time now💁🏻‍♀️

        Liked by 1 person

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