Bonolo Mokua

A survival guide to borrowing wisely

Values & Money , Wisdom in Borrowing

When payday feels decades away, it can push you straight into the arms of payday lenders or loan sharks who can give you all the cash that you need at short notice, but this loan usually comes with extremely high interest rates – making it nearly impossible to pay off.

Most loan sharks use words such as “Quick same day paperless loans in 5 minutes” and “blacklisted can apply”. While these can all be attractive to someone in desperate need, remember that if you can't pay back your loan, there is no limit to what you can be held liable to pay back, keeping you in a constant debt loop because of penalty rates.

Have you ever asked yourself why most loan sharks have such high interest rates? The reason behind this is simply because they operate outside legal lending channels. Remember that if a bank has already declined your loan it means that the bank believes you won't be able to afford repayments – so don’t then go running to a loan shark.

How to borrow wisely

Ask yourself: What are you borrowing for?

From a cracked windscreen where you have to find the money to pay your insurance excess, to needing money to cover unexpected medical expenses – emergencies come up every now and then. If you don’t have your own “emergency fund” that you have built up monthly, it could lead to you needing to borrow money to make up for the shortfall.

But these should all be covered by your savings – remember that it’s not good practice to borrow for these things.

If you have to borrow, you should borrow to pay for things that have lasting value, such as your home, home improvements, a motor vehicle, or perhaps big furniture items Don't borrow for things you can consume immediately.

If you have to borrow, assess your needs.

Before borrowing money, carefully consider why you need the funds and how much you need. Determine if borrowing is necessary and if there are alternative ways to meet your financial needs. If you make a monthly budget and stick to it, it helps minimize your need to borrow money.

Here are some tips on how to borrow wisely to avoid making reckless borrowing mistakes


  • Understand your financial situation: Take a close look at your current financial situation, including your income, expenses, savings and existing debts. Make sure you have a clear understanding of your ability to repay the borrowed amount. Starting your own “emergency fund” (by saving something each month) that you can dip into when you need money can go a long way in helping you minimize the need to seek other funds from accredited lenders.

  • Borrow only what you can afford to repay: While it may be tempting to borrow the maximum amount offered to you, only borrow what you need and can comfortably afford to repay. Consider your monthly budget and ensure that you'll be able to make the required payments without causing financial strain.

  • Have a repayment plan: Before borrowing, develop a repayment plan to ensure you can pay back the borrowed amount within the agreed-upon time frame. Make sure to include the loan payments in your budget and prioritize them to avoid defaulting on the loan. If you cannot pay, contact your lender and be honest about your financial situation.


  • Shop around for the best terms: Don't settle for the first borrowing option you come across. Research and compare interest rates, fees, repayment terms and other conditions from multiple lenders or credit sources. Choose the option that offers the most favourable terms for your situation. Your budget must include the repayment terms that you have committed to.

  • Consider the total cost of borrowing: Look beyond just the interest rate and consider the total cost of borrowing, including any fees, charges and penalties associated with the loan. Understanding the total cost will help you make an informed decision about whether the loan is affordable for you.

  • Read and understand the terms and conditions: Before signing any loan agreement, carefully read and understand all the terms and conditions. Pay attention to details such as interest rates, repayment schedule, fees, penalties for late payments and any other relevant terms.

  • Maintain good credit: Your credit history and credit score play a significant role in determining the terms and interest rates you'll be offered when borrowing money. Make sure to maintain good credit by paying bills on time, keeping credit card balances low, and managing debts responsibly.

  • Consider seeking professional advice: If you're unsure about the borrowing options available to you or the implications of taking on additional debt, consider seeking advice from a reputable financial advisor or credit counselor. They can help you evaluate your options and make informed decisions based on your financial situation and goals.

By following these tips and borrowing wisely, you can use loans and credit effectively to achieve your financial needs and objectives without falling into unnecessary debt or financial hardship.

For more information and resources you can do our Values & Money course which examines your current attitudes, behaviour and values around each of our money values: honesty in earning, responsibility in spending, self-control in saving, wisdom in borrowing and generosity in giving.

I am an image
Bonolo Mokua

Bonolo is a multimedia journalist and content creator at Heartlines. She has experience in online and radio media production and helps spread the Heartlines message on multiple platforms.


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