I Took a Loan Against My Car and Regretted it Immediately: Money Confessions.

Last week I was sitting with my cousin when I received a call. I clicked loudly and hung up then got a second call immediately. My cousin must have sensed the anger rising in my eyes and gotten curious. 

“Bro, kwani who hurt you so bad. Are you having trouble with the wife ama what’s up?”  he asked. 

This was the first time I was sharing the story of my worst financial mistake. 

I got fired six months ago and within a few months, I got into a financial crisis that I could not have anticipated. 

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Two months after losing my job, I sought a loan of Ksh150,000 to pay for my kid’s school fees and pay off at least 3 months of rent as I looked for another job. 

I had already used up my emergency fund and my wife was taking care of their day to day expenditure.

One day I was at the petrol station getting my car tyre pressure checked when a beautiful lady approached me asking if I wanted a quick loan where I could use my car as security. 

I enquired on what they would need to give me the loan and it seemed all easy. The repayment amount seemed sensible and within my reach, and with my dire financial situation - I did not bother much with the actual terms of the loan. 

Two days later I had signed the papers and happily received the cash.  I had about a month of peace before the calls began.

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When I wasn’t able to pay back the first instalment, the penalty was so heavy but then, this had been indicated in the papers which I had not read.

I later learnt that some fees that come with loan agreement which I had not read included application fees, appraisal fees, service fees, early exit fees, early repayment fees, insurance fees, and penalties for late payments. 

If I had gone through the legal agreement before signing I would have realised that my loan was not as cheap as I thought.

I am still struggling trying to pay the monthly fee for this loan. Every month I pay Ksh15,000 which is Ksh8,000 more than what I thought I would be paying after my conversation with the lady at the petrol station.

 I have sworn that once I get that money I will pay in cash and never again take an unplanned loan whose terms I do not understand.

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I should have asked a professional to review my loan agreement before signing it. This way I would have understood the repossession terms, my rights and obligations, negotiated the terms and most importantly understood whether I could afford the loan or not. 

I am looking around for a car buyer so I get this out of my mind. My plan is to come to an agreement with my debtors so I can sell the car, pay back the loan and at least have some money on me.