Taking out a loan is not unusual. In fact, a lot of people have debts. They need loans to purchase a house or vehicle, to invest in business or in education, or to pay emergency bills. A loan can help people with their goals in life if used sensibly. However, it also has negative implication since it suggests that people need to borrow money to acquire what they can't afford. That is not always the case as there are times that loans are necessary. Still, loans can bring more harm than good if abused.
There are people whose lives suffered terribly because of excessive debt. There are numerous reasons for this. Some people miscalculated the numbers and later realised that the loan is beyond their ability. There are also those who keep borrowing funds to repay their old loans. Other people, meanwhile, have sadly lost their source of income, and therefore have no means to pay their debts anymore.
If there's no other option but to get a loan, then it's crucial to plan it accordingly and to practice discipline in paying it back. Before signing any loan agreement, determine first your finances. Remember that it's not free money and that you're going to pay the loan back including interest and other fees that the money lender might see fit. So be truthful with yourself and find out if you can really pay back within the conditions of the loan without compromising the payment of your other bills.
Choose a repayment term that works best for you. If there are choices on payment period, make it the same time as your wage date. If you get compensated twice per month, then make bi-monthly payments. There are credit companies that offer discount when you get to pay back the total amount earlier than predetermined. So if you can, make the most of this. If you suddenly find yourself with spare cash, it's best to put it into your loan payment.
As a general rule, if you are still paying back a loan, don't request for another one. But given that not all loans are for the same goal, this is not relevant all the time. However, it can be financially stressful to pay for more than a few loans simultaneously. If this happens, consider consolidating all your loans. It may be the best solution for you.
There are people whose lives suffered terribly because of excessive debt. There are numerous reasons for this. Some people miscalculated the numbers and later realised that the loan is beyond their ability. There are also those who keep borrowing funds to repay their old loans. Other people, meanwhile, have sadly lost their source of income, and therefore have no means to pay their debts anymore.
If there's no other option but to get a loan, then it's crucial to plan it accordingly and to practice discipline in paying it back. Before signing any loan agreement, determine first your finances. Remember that it's not free money and that you're going to pay the loan back including interest and other fees that the money lender might see fit. So be truthful with yourself and find out if you can really pay back within the conditions of the loan without compromising the payment of your other bills.
Choose a repayment term that works best for you. If there are choices on payment period, make it the same time as your wage date. If you get compensated twice per month, then make bi-monthly payments. There are credit companies that offer discount when you get to pay back the total amount earlier than predetermined. So if you can, make the most of this. If you suddenly find yourself with spare cash, it's best to put it into your loan payment.
As a general rule, if you are still paying back a loan, don't request for another one. But given that not all loans are for the same goal, this is not relevant all the time. However, it can be financially stressful to pay for more than a few loans simultaneously. If this happens, consider consolidating all your loans. It may be the best solution for you.
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