Sanlang Utang: Understanding the Dangers of High-Interest Loans
- earlyretirementjou
- Jul 24, 2023
- 2 min read
Every day, I receive numerous offers for "Sanlang Utang," where lenders promise quick cash with seemingly attractive terms. These offers often include borrowing large sums of money with substantial interest rates, such as 500,000 pesos with a 35,000-peso monthly interest or 250,000 pesos with a 10% monthly interest for a year. While these offers may be enticing, it is crucial to understand the potential risks they entail.
Many borrowers who take up such offers are individuals with rental properties, businesses, condos, or hotels in the province. With the influx of money into their ventures, one would assume they are financially secure. However, the sad reality is that despite their earnings, they find themselves struggling to make ends meet due to the heavy burden of interest.
No matter how much you earn, if you lack proper money management skills or financial literacy, your income may slip through your fingers like water. It doesn't matter if you have businesses, rental properties, or a stable job – without the ability to manage your finances wisely, your hard-earned money may disappear, leaving you trapped in a cycle of debt and stress.
Some individuals tend to take on too many assets, thinking they can handle the financial responsibilities. They might acquire a condo or a car and invest in a business all at once, only to find themselves lacking funds and resorting to borrowing money. It is crucial to assess your financial capacity and ensure you have multiple sources of income before taking on such significant financial commitments.
Remember, "cash flow is king." Even if you possess various assets, without a steady stream of income, you may find yourself drowning in expenses and financial obligations. Having a stable cash flow ensures you can cover your expenses and stay afloat, even in challenging times.
Before considering any high-interest loans or "Sanlang Utang" offers, conduct a thorough self-assessment. Evaluate whether you can comfortably afford the monthly payments and the total amount due at the end of the loan term. Be cautious about entering such agreements, as they can quickly become a burden and cause unnecessary stress.
Personally, I refrain from taking up such high-interest loans, as I understand the potential risks they pose. It's essential to be empathetic towards borrowers and avoid putting them in a situation where they might struggle to meet their obligations.
In the world of finance, it's vital to know yourself and your financial capabilities. Continuous learning about personal finance and prudent decision-making is essential. Be wary of tempting offers that promise quick cash but come at a high price. Instead, focus on building sustainable wealth and securing your financial future.
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