In conclusion loan is not for everyone but for people who are financial minded or wise, and not for guys who should not have been using dept due to lack skill and or using it in the wrong circumstances.
I agree with you on this, some people doesnt understand what loan is meant for, as a matter of fact before anyone access a loan facility or individual loan, such person should have consider a means of paying back such loan to avoid indebtedness, you don't get a loan just because you heard that MR A got a loan and it favoured him in achieving whatever purpose he got such loan for, in the aspect of accessing a loan for Bitcoin investment or whatever investment one want to go into I will only support this if the person involved understands how to manage financial risk and also have the ability to plan with the amount available to enable him or her process whatever idea he wants to invest on to a realistic investment then such person is good to go.
Loan is meant for people who are not financial reckless that are ready to turn any amount given to them into some good amount not people whose purpose of getting a loan is to invest in something that may keep them financially stranded in a short while if care is not taken.
When a person calculates the advantages and disadvantages of getting a loan versus not getting a loan, there might not even be a very great difference between the two options.....
For example, one option is to get the loan, let's say the loan is for something like $12k, and the payback period is over 2.5 years with a minimum payment on the outstanding balance of 1.5% per month with a balloon payment (of the remaining balance at the end of the 2.5 years), and the interest rate is 6% per year compounded daily. Maybe there is also a $50 origination fee.. and no penalties for paying back early.
The person can figure out the terms of the loans and figure out if he wants to get the loan, and perhaps the purpose is to build his credit but also he wants to front load his investment into bitcoin, and maybe the bitcoin price will go up in the next 2.5 years and maybe it will not. so he considers the cost of frontloading the investment to be the interest rate and the fees.. and so if his monthly payments are starting out around $180 per month, and then he will have had paid nearly half of the loan over 2.5 years, and maybe he still would owe something like $7,500 at the end of 2.5 years, and he might have to figure that he is buying the bitcoin in advance, and he is paying back the loan with his income as it comes in.. and then he just has to make sure that he has $7.5k-ish and that he is not depending on the bitcoin price to go up in order to make that remaining balance.. .. sure if the bitcoin price goes up during that time, that is fine, but he is not dependent on the bitcoin price going up since he can pay back the loan either way.. so he is not gambling, but he is making a calculation about whether it is going to be worth around $1,800 extra for him to be buying the bitcoin earlier rather than just buying bitcoin over the next 2.5 years as his income comes in. The result of the decision could go either way.. and surely the terms of the loan if it is more harsh or it is more lenient could make differences in regards to entering into the loan.. and also if there are risks that the guys income could dry up, then he has to account for those kinds of back up plan situations in regards to how he would service the loan if those kinds of additional stresses were to happen... if the guy knows he has a good income and he knows that he even has back up income that he could do if his primary income dries up, then he is in a stronger position as compared to a guy who might be thinking about going to university and quitting his job or he might have less ability to be assured about his income in the coming 2.5 years, then he might be more hesitant to enter into such debt.
Very impressive explanation JJG. However, it's good to note that loans of these good interest rates and comfortable conditions are gotten from government agencies, banks and other less greedy loan merchants. It is also noteworthy that this kind of loans are not easily obtainable by people who do not have complimentary collateral to present, thereby limiting poorer people's access to such loans.
In my country, it takes a lot and more like an eternity to be given these kind of loans and the loans that are easily accessible are those given by loan sharks who charge as high as 25% interest for just 30 days, which stipulates that in less than 5 months, you'll be accruing an interest of 100% of the loan amount. Those aren't suit for this kind of swipe at Bitcoin investment and I personally don't think it's a good option since the interest can end up putting the borrower in a big mess.