I’m paying twice!

At the end of November, I got a loan with an agreement that they’d pay off a loan from my previous lender.

Now both lenders are deducting money from me because the first lender says they haven’t received anything from the second. It’s now 2 months and both offices are saying they can’t help me. I’m now in financial problems because of that. Please help me sir.

I’m very happy to speak to both lenders to find out what went wrong and to encourage them to fix their mix-up. However, I think there’s a more important issue here. If you are borrowing money from one lender to pay off a loan from an earlier lender then I’m scared that you might be in a spiral of debt.

When faced with debt, many people think the solution is to borrow even more money to pay off earlier debts. In my experience, that’s a sign that their debt might be out of control. In these cases, it’s time to seek some professional advice. I can put in you in touch with ethical debt counsellors who can help you to take a hard look at what you owe, your income and help you develop a plan to rationalise what you owe.

I know it’s easy to say, but debt can be a crippling burden. Of course, there are some types of debt that are reasonable. Very few of us have enough money to buy a house for cash and that’s a situation when borrowing money from a bank is a reasonable thing to do. Also, in most circumstances, a property will increase in value during the term of the loan so it probably makes sense. However, you should ALWAYS be careful when borrowing money to buy something that will lose value, such as a vehicle.

The lesson is simple. While debt can sometimes be a sensible thing, it’s something we must approach with great caution and only after we’ve sought advice from experts. Remember that lenders don’t lend money because they’re kind and generous people, they do it to make money from the people who borrow from them. It’s their business to make money from us. Be careful.