Good Loan vs Bad Loan

Note: The numbers mentioned in the table below are subject to change

Good Loan	Bad Loan
A loan that charges an interest rate between 7%-11%	A loan with an interest rate above 15%
A loan which is given after fact-checking and along with a signed contract	A loan given on word of mouth
A loan taken within the means of the borrower and can be paid off with proper planning. for example, a loan taken for buying a motorbike for which we can pay back comfortably through our salary and other sources	A loan amount is taken beyond what a borrower is capable of returning. For instance, loans we take for marriages or for buying a motorbike when we cannot afford one
A loan given with a long payback period, depending on the borrowed amount	A loan given within a short time period in which it needs to be paid back
A loan given by a reliable lender that follows a set of laws applicable to all borrowers	A loan given by a lender without a proper lending practice which is followed for all their borrowers; any sort of bias which interferes with the loan amount; a good record of their lending business is a bad loan
A loan taken for reasons that will enrich our lives and be paid back in full through reliable income sources, like salaries and investments	A loan we take to pay back another loan. For example, we might take a loan from a moneylender to pay back a loan taken from a commercial bank, but we do not have any other way to pay back the moneylender, leading us into a debt tap

Loans can turn out to be good or bad for you depending on how you choose to utilize them.
A loan that is taken within the means of the borrower and can be paid with proper planning is a good loan.
A loan whose amount is beyond what a borrower is capable of returning is a bad loan.

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Personal Loans and P2P Lending Apps

Learn about the basics of taking a personal loan and how to borrow money using P2P lending apps

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