The fact that you qualify for a loan does not mean you should go ahead and sign that loan deal!
Yes, personal loans give you the opportunity to solve some issues with it, but not all issues requires solving with a loan.
Whether you should take a loan or not finally lands at personal decision.
If you do have a real need to borrow, try to be be smart about it and find the product that makes sense — it won’t always be a personal loan. Sometimes, it’s better to delay a purchase! save the old fashioned way and pay in cash instead of burdening yourself with more debt.
Here are 3 items you should reconsider taking out a personal loan and turn to other options instead.
unlike unsecured loans, an auto loan is a secured debt, backed by a collateral. This Might be the car you are purchasing or something of value. This simply means that if you are unable to pay up your debt as agreed, the borrower will repossess your new Car or that property you used as collateral, sell it and take his money back.
Although its of less risk to the lender to loose his cash this way, the borrower is faced with the shame and stigma of loosing on both ends.
With personal loans higher than Auto loans at 138.92%, borrowing to finance your Auto loan is simply not gainful to you.
Recent Studies shows that people now readily take out loans to fund their Vacations and Pleasure lifestyle. Vacations are non-necessary purchases you can save and plan for. Simply doing this means going against the rules of personal finance.
Instead of using a personal loan to pay for a vacation, why not plan a less expensive trip closer to home that you can pay for in cash. Or delay the expensive vacation and make a plan to save up for it.
Why would you take up a loan to fund your wedding? Don’t you think its too extreme?
Such major steps in life calls for a Major saving plan. When you fail to plan, a personal loan will not be the best solution to solve the problem. Instead of taking out a personal loan, tart early to save for thses important life moments.
READ ALSO; FirstBank Auto Mobile loans.
Think Twice Before Taking Out A Personal Loan
If after reading this, you’re thinking of taking out a personal loan, make sure it will further a financial goal rather than set you back.
Calculate your personal loan payments to ensure you can fit them into your budget.
set today’s money priorities to match your long-term goals.
With some proper planning, budgeting and saving, you can set yourself up for a debt-free future and lasting wealth.
I remember my banker telling me of how most rich men are Neck DEEP in debt.
READ ALSO – Money management skills for a successful life