Money lenders are everywhere this days every different products and rates.
Unfortunately, the easiest loans to get are often the most costly to pay back. Before you decide to borrow money, make sure you review all lending alternatives and carefully read all documents involved.
Firstly, Make sure you read and understand all the terms in the
Agree ent. Are the rates variable or fixed and do you understand how your finance charges are calculated? If you must borrow money, be sure to budget for payments, interest and finance charges.
Financial experts warn that a loan should be a last resort. Maybe you shouldn’t borrow money now; have you tried saving for purchases?
If loan is your best option, it is necessary to choose one appropriate for your personal situation. Don’t borrow money from a lender without knowing the different types of loans. Here are what you must ask if you need to borrow money. There are times in most people’s lives when your wallet isn’t big enough to cover some surprise expense. You can find yourself a little short without realizing how it happened. If you do need to borrow money, you need to take many factors into consideration before you act. Like, how much do you need to borrow? How soon do you need the money? How soon will you be able to repay, and can you afford interest? What is the nature of the expense? Is it necessary? Is it urgent? Do you have friends or family from whom you could borrow reasonably? Will your job give you an advance on pay? What are your existing debts, and can they and new debt be managed simultaneously?
When should I borrow money?
Borrowing money is a wise practice when you know that you certainly can pay it off, with interest, at the end of the lending period. The longer the loan, the more you need to be certain that you’re keeping to a payment schedule, so job security is also important. A loan should last long enough for you to save the money to repay it, and be saved primarily for urgent needs that cannot wait, like car repairs for example. Borrowing from friends and family is always an option, though sometimes risky. When you don’t want to strain relationships with those close to you by bringing money into the equation, borrow money from a certified lender.
Again, the most important thing when it comes to borrowing from a lending company is paying back, in full and with interest, your loan.
Not only is it a part of the contract you will sign and a legal obligation, but also failing to do so can result in penalties.
Another thing you need to consider is, what if I can’t repay? This is something you should avoid if at all possible. This is a question you need to ask yourself before borrowing any amount of money. The consequences for failing to repay on time can be very serious and long-lasting. Some lenders will charge late fees, further compounding your financial problems. Others do not charge fees, but still will negatively affect your credit score during when you miss a payment. Miss enough payments and your lender will put your debt to a third-party collection that will be persistent in retrieving the dues.
Finally, limit what you borrow because you will not become rich by living on borrowed money (credit cards, loans) and so on. People initially think that borrowing is manageable. But our country is full of examples when managing debt becomes overwhelming. Borrowing should never be done without an objective assessment of future cash flow and other financial needs. One needs to have a solid plan to pay the debt back and not become its lifetime slave. A debt-free life is the best life.
Businessdayonline – culled from: http://businessdayonline.com/2015/07/understanding-the-concept-of-borrowing-money/#.VajuOZyvDNi