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TRENDING BASIC MONEY MANAGEMENT TIPS
03.31.2020 / Borrowing « Back to all articles
5 Important Tips to Becoming a Savvy Borrower
Reduce the Risk of Borrowing
The shock of the Great Recession has largely faded, and people are less shy with debt than they were a decade ago. The proliferation of student loans and credit cards has accustomed new generations to the idea of borrowing money and managing debt. Of course, as borrowing has increased, so have the number of horror stories about men and women who have borrowed themselves into a nightmare. Loans are nothing to take lightly, and a smart borrower will evaluate all their options and know exactly what is needed before signing on the dotted line.
Decide Whether to Borrow at All
A smart borrower is not so tied to the idea of a loan that they cannot walk away. A loan may seem like the easiest and quickest solution to a money problem, but it is a decision that will usually last for years to come, so it is worth taking an extra minute to decide on the terms and read the fine print. Don’t rush into borrowing until all questions have been answered, such as:
- What is the interest rate?
- How much will my payment be each month?
- Are there any extra fees?
- Will I be penalized if I pay off the loan early?
Know What Collateral Is Available to You
Collateral is what you offer the financial institution in the event of a default on the loan so that they can be sure to get their money back. Usually this is the house or car itself or whatever is being financed.
Be Patient & Shop Around
Don’t rush into a loan-be patient and read all of the documents before signing. Interest rates fluctuate, so it may be worth it to wait for interest rates to drop or fees to disappear. Be sure to go to at least a few different places to compare loan terms.
Find out the different possibilities before settling on one loan. Don’t be afraid to take the offers you are given to other lenders or institutions to see if they can compete. A little time spent at the beginning can potentially save a lot of money down the road.
Have a Plan for Paying Off Debt
And finally, although it might seem like free money, it is not. Do not borrow more than can be handled in the budget and be sure to have a plan for paying it off. Make sure that the agreed amount can be paid off over the course of the loan terms. Use loans as a tool for financial freedom instead of a source of income.
Credit Talk
03.31.2020 / Borrowing « Back to all articles
5 Important Tips to Becoming a Savvy Borrower
Reduce the Risk of Borrowing
The shock of the Great Recession has largely faded, and people are less shy with debt than they were a decade ago. The proliferation of student loans and credit cards has accustomed new generations to the idea of borrowing money and managing debt. Of course, as borrowing has increased, so have the number of horror stories about men and women who have borrowed themselves into a nightmare. Loans are nothing to take lightly, and a smart borrower will evaluate all their options and know exactly what is needed before signing on the dotted line.
Decide Whether to Borrow at All
A smart borrower is not so tied to the idea of a loan that they cannot walk away. A loan may seem like the easiest and quickest solution to a money problem, but it is a decision that will usually last for years to come, so it is worth taking an extra minute to decide on the terms and read the fine print. Don’t rush into borrowing until all questions have been answered, such as:
- What is the interest rate?
- How much will my payment be each month?
- Are there any extra fees?
- Will I be penalized if I pay off the loan early?
Know What Collateral Is Available to You
Collateral is what you offer the financial institution in the event of a default on the loan so that they can be sure to get their money back. Usually this is the house or car itself or whatever is being financed.
Be Patient & Shop Around
Don’t rush into a loan-be patient and read all of the documents before signing. Interest rates fluctuate, so it may be worth it to wait for interest rates to drop or fees to disappear. Be sure to go to at least a few different places to compare loan terms.
Find out the different possibilities before settling on one loan. Don’t be afraid to take the offers you are given to other lenders or institutions to see if they can compete. A little time spent at the beginning can potentially save a lot of money down the road.
Have a Plan for Paying Off Debt
And finally, although it might seem like free money, it is not. Do not borrow more than can be handled in the budget and be sure to have a plan for paying it off. Make sure that the agreed amount can be paid off over the course of the loan terms. Use loans as a tool for financial freedom instead of a source of income.
