Many of us will think about borrowing at some point in our lives, either to build a house, start a family or to buy a car. Borrowing is very important and something very crucial, so borrow responsibly. Before you borrow always set all alternatives on the table and think which is best for you. You must consider whether you need a loan, and what type of loan; also consider whether it would be best for you to get a revolving credit such as a credit card. Whichever alternative is best for you, always consider interest rates and types of loans and credit card limits, never get more than what you can handle.
3 points to consider when you obtain credit or a loan:
- Consider your monthly income and job security before you borrow, make sure your income is sufficient to pay for your loan or credit as well as all other expenses. Be realistic when planning your budget and donít forget to include some type of savings.
- To make sure you have funds available every due date, you should set aside funds each month towards your debt even if it means giving up some non-necessities, which is always better to do rather than obtaining a bad credit history. In an effort to not skip a payment you would want to consider getting a standing order on your loan or credit card so that every month you donít have to physically set aside any cash, but rather the bank would automatically debit your account. Making it less tempting to spend what you owe.
- Make a calendar to remind you of your payment due dates and mark them out as you meet each one of them. Every time you mark your calendar you should feel motivated that you are getting close to the last payment. When you finally pay off your debt donít forget to celebrate, but make sure you budget for it.