Before taking a credit facility this holiday period, you need to understand that there are risks in using loans for Black Friday shopping in 2022. While loans are readily available and easy to apply for, that doesn’t mean they’re a smart option.
Black Friday is a well-known global phenomenon that started in the United States of America. This shopping tradition slowly crept all over the world and today is being marked in almost every country.
Online and physical stores are known to be busy this time of the year as big brands slash prices in the run-up to Christmas.
The same can be said of Cyber Monday, the Monday immediately after Black Friday.
What is a Black Friday loan?
Black Friday and Cyber Monday loans are typically personal loans to help you take advantage of the super sales that happen every year during the holiday season.
This year, Black Friday falls on the 25th of November.
However, most online, and physical shops in Nigeria are having a month-long sale.
Whether you’re shopping for presents for Thanksgiving or Christmas, Black Friday and Cyber Monday loans in Nigeria help you cover the festive expenses.
A personal loan for Black Friday and Cyber Monday shopping allows you to spread your expense into fixed, affordable monthly installments.
There are several platforms in Nigeria offering loans this period at competitive and attractive interest rates.
Black Friday vs Cyber Monday in Nigeria
Cyber Monday comes three days after Black Friday — the Monday after, naturally — and revolves around online deals. This year, Cyber Monday falls on November 28.
Although it started off promoting online shopping, Cyber Monday has transformed into a day when tech products are more widely discounted than anything else.
So, if you are going for your regular home appliances like deep freezers, washing machines and oven gas cookers, Black Friday is your day.
But if you are more inclined towards electronic gadgets like smart TVs, handsets, laptops or other such devices, Cyber Monday is for you.
It is even said that Cyber Monday is actually now even bigger than Black Friday as retail sales on Cyber Monday in 2020 soared to a record high of $10.8 billion online.
That said, overall savings aren’t the only thing to consider. Different products receive better discounts each day, and the deals that each retailer offers will vary.
In Nigeria, Black Friday deals are known to crop up weeks before the actual day. Retail giant, Jumia for instance, is having its sales every Friday in the month of November.
Should you borrow money for Black Friday shopping?
Black Friday and Cyber Monday sales are known to offer some of the most rewarding deals of the year, especially if you’re looking to buy presents for Christmas. While you can always plan for such expenses, there is no predicting when you may fall a little short of cash.
Since it is the biggest sale season of the year, it’s natural for people to take advantage of the heavy discounts. In a situation where you are strapped for cash, a personal loan could make for great financial aid to take some pressure off your shoulders.
Personal loans enable you to split the cost of your expense into affordable monthly installments without the hassle of collateral.
Another plus side of personal loans is that they’re disbursed directly into your bank account, allowing you to pay for your expenses upfront.
Advantages of taking a Black Friday loan
Before opting for a Black Friday or a Cyber Monday loan, it is important to weigh the pros and cons.
Accepting a Black Friday loan in Nigeria may not be a bad idea if you take the following advantages into consideration.
- Liberty to choose desired repayment term.
As with most personal Black Friday loans in Nigeria, borrowers have the liberty to choose a repayment plan that suits their pocket.
- Manageable loan installments
Because of the slash in prices, many have come to see Black Friday shopping as an opportunity to purchase pricy items like large household appliances. That way, payment can be easily spread across several installments.
- No collateral is required
Most Black Friday loans are personal loans and naturally do not require collateral.
- Quick processing and fast disbursal
Black Friday loans in Nigeria by nature are quick to access and disbursal comes within minutes.
Risks in using loans for Black Friday shopping
1. You acquire debt.
Taking a loan for Black Friday shopping is just another debt acquired. On the surface, it may seem like a good idea but it may just be another debt burden you have to pay off.
2. Could harm your credit score
A Black Friday Loan may be a good idea but if not properly handled, may end up hurting your credit score. This happens mostly when the borrower fails to meet up with their repayment agreement.
3. May incur additional charges
If you are not careful, lenders may levy additional charges on your loan. Some of those hidden charges may include early repayment charges, processing fees, and so on. Be sure to read the terms before you accept the loan offer.
4. Poor credit may affect borrowing
Borrowers with low credit may not get loan offers. And even when they do, the chances are that the interest rates may not be friendly.
5. More financial obligation
If the loan term is too long, you may end up accruing interest for the longer term. This means having to spend more money than you ordinarily would.
Tips for shopping with a Black Friday Loan
The important thing to remember is to use credit responsibly. Missing your repayments or defaulting on your loan can have a lasting impact on your credit score, hampering your chances of securing credit in the future.
However fun sale shopping might be it is crucial to keep your affordability in mind.
So before taking that loan for your Black Friday shopping, make sure you have your repayment plan well laid out.
If you are already paying off another loan, it would be unwise to take another to go for Black Friday shopping, no matter how tempting the sale may be.
The wise thing to do would be to save towards next year’s Back Friday sales.
Another helpful tip would be to build a shopping list before you go Black Friday shopping. That way, you are protected from impulse shopping.
Also, make sure Black Friday deals are actually deals. So retailers are known to jack up their prices a few days to the sales, and then discount it to the original price.
You can do this by finding the item you want to buy and then start comparing prices to find the cheapest.
Using a price tracker might help. If you want to know whether you are getting a deal, there are websites that help you check the price history of a product.
Another way to prepare well for shopping online is to start saving items to an online wish list so items are ready to be placed straight into your trolley as soon as they go on sale.
Don’t be trawling through Black Friday deals unnecessarily.