Why you need to borrow money?
The purpose of lending money can be personal or professional. One should always think before borrowing money. Monitor the actual need to borrow money whether it is urgent or you need that to spend on any item. Estimate your budget whether you can afford to pay it back with interest or fall in debt.
Before one lends money via a personal loan for child education, marriage, house renovation, or payment of your credit card bills whatever be the cause always be cautious for not a paying huge amount. To live better lives discover here how these unexpected expenses may worsen your routine life.
Consider the following things before lending money:
- Ask yourself if you need to borrow money? It makes a considerable difference to have that money for some urgency rather than spending it for your leisure purpose. However, if you lack finance then it makes you borrow money to fulfill that task.
- How essential is that thing for me to purchase? There are many things available in the market. But we need to check whether it is that important or you can wait for it sometime later. Always get your selected item in interest-free installments rather than pouring your whole amount on one item.
- One should always borrow only that part of an amount which can be paid accordingly within the budget. Estimate your budget what part of amount you are paying, till what % percent you can save and invest. If not monitored, it may lead you to borrow more money out of control and become havoc to settle the same for a long term.
- How much will it cost you to lend money? The answer is obvious; you need to pay the interest with the principal amount and that will increase the amount you borrowed for your personal or professional purpose. If using an credit card for instant money see that you spend less amount and can pay off the bill as quickly as possible. USE IT WHEN YOU ARE IN NEED AND NOT WANTS.
- How is it going to affect your credit score? Before any client borrows the money, they should always consider the consequences as what impact it will leave on their credit score. You need to ensure that your borrowed money is not higher than your income which may increase your debt ratio. Try to discover here the possible way to minimize the usage of creditupto 30% and carrylow balances to pay them off as quickly as possible.
Before you borrow money for yourself or your family ask the above questions to keep yourself safe from foolish expenditures and debts. Try to save your credit score as it is solely your responsibility and has nothing to do with anyone else. Utilize that money to spend for real cause when you need it.