Why You Should Avoid Unnecessary Loan

[Jasz]

When you owe others money, your business is at risk for default. Defaulting on a loan or credit card can easily devastate your credit rating and make you ineligible for future loans or credit cards.
In addition to the damage to your financial reputation, if you default on a loan or credit card, the creditor may take action against you. The creditor may cancel outstanding loans and accounts, or repossess property that is securing the loan. In some cases, creditors will also sue you for money owed that has yet to be paid off.

If you're delinquent on payments, a creditor may sue you in small claims court to collect what it's owed. If the creditor wins its case against you in small claims court (where the amount of damages awarded doesn't exceed $5,000), it can expect to recover 25 percent of its losses — plus attorney fees.

 

[Kennysplash]

When you talk of unnecessary loan that means loan that you can actually do without. I don't see reason to collect such loan because it is not something you really need. The reason for loan is for emergency, when you have an urgent need for it. So if you take it without any significant reason you have to pay it back with interest which makes no sense whatsoever.

Another reason people go for loan is to use it to further their business, that way they will make profits and return back the borrowed amount with interest. This has helped many people to take their business to the next level.
So if you take loans with nothing much to use it for then you are wasting money that you will pay back as interest.

Have a plan for your money whether it is a loan or not, don't use them unnecessarily.