If nothing is chasing after you so urgent to

take a loan, follow me and let's do this mathematics.


FRIEND A wanted to build a one bedroom self contained. He has no land. He went for GH10,000 loan from Teachers Fund for a duration of 5yrs which is equivalent to 60 months. 448gh is deducted from his salary every month. If you multiply it by the 60months, by the end of the five years, he would pay a total of GH26,800. If you subtract the one they have given him from it, it means he is paying GH16,800 as interest. Almost times two of the amount he went for.
Unfortunately for him, after buying the land and starting the project, the money got finished on the way. He irected the structure alright but he needs extra GH5,000 to finish it so that he can move into it. He can't take more loan because he doesn't have affordability. He has to wait after paying the previous one or when he is able to pay halfway, say two years or three years, he can go for loan topup.

Friend B has similar plan. He did the necessary enquiries and knows the that he would need 15,000 for the project which according to his calculations, he can raise in three years. He decides to go to his bank and place a standing order that the bank should keep 448gh in a separate account for him each month. In two years, he has GH10,752. He bought the land and started the project and reached where the same level as the first person. He did the same thing for one more year and he was able to raise the GH5,000 to complete the project. Since he is now used to it putting away that amount of money, he did it for extra two years and use it for investment.

Friend A is still waiting to finish paying so that he can can go for more loan to complete the project. Or probably, in the third year, he would go for a topup to complete the project which will again increase the number of years he has to pay off.
Friend B can decide to gather enough to buy land first year, start second year and complete third year. So that inflation and devaluation wont affect him.

I may not have much of a problem with friend A if the amount of money he went for, completes the project. At least, he won't pay rent again and that five years rent may cover up something. Or, if you are in your own house and and you are hungry, at least, you would look at the walls and console yourself. I understand that there are certain circumstances beyond control and very urgent that you have to go for loan at all cost. A colleague once shared a touching story.

He sent two pupils and a pregnant lady to cross river to work on his farm. Unfortunately, the boat capsided and they got drowned. The families requested that he takes care of the funeral. In this case, going for these 30minute loan is in order.

But in other cases, let's take our time and do due diligence using PATIENCE AND DISCIPLINE AS OUR WALKING STICK.

-----Hon. Jerry Akporhor

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