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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.
You are correct. The worse the loan terms, the less justifiable to enter into such loan, and I already mentioned that even though I was describing a loan example with a 2.5 year term, many times people will have trouble getting any loan for that long - yet not everyone is in the same situation, so there can be acceptable loan terms that people can get, in which it becomes more tempting to take advantage of better loan terms, especially if you know about some kind of a way to use the loan to make more money than it costs to pay the interest (and other service fees) associated with the loan.
Of course, I also mentioned that anyone planning to take any loan should be able to have abilities to pay back the loan with proceeds other than what is being invested into, especially in our example of a loan that is planned to be used to buy bitcoin.