In an ideal world, none of us would need loans and we would all be able to sustain ourselves. The reality is that most of us end up borrowing money from a financial institution to make sure that our dreams are fulfilled and we achieve our goals.
While taking a loan always make sure that you try and repay it as quickly as possible and try and keep the duration of repayment as short as possible. The longer the duration of repayment, the more interest you’ll end up paying to the lender.
The most important thing to keep in mind is to always keep the loan amount as less as possible. Only apply for as much you can afford to repay. Never take a loan amount that will take away most of your salary, leaving you with nothing to lead a balanced life.
Make sure that you pay the bank regularly as mentioned in the terms and conditions to avoid unpleasant dealings with the bank. Your credit scores will be affected if you fail to repay your monthly loans on time and this may hinder your chances of getting a loan at a good rate of interest in the future.
Never borrow money for expenses like shopping for clothes, luxury bags or watches. Also, remember never to borrow money to invest in the stock market as you could end up losing your entire investment in there are sudden fluctuations in the market.
If you have a long-term loan, keep a look out for new offers by different banks. If you find a better deal you can always shift your loan to another bank and pay the new interest rate which will help you save money. Make sure you go through the penalty charges for changing bank loan before you make this decision.
If you’ve just started saving for your dream home or for your retirement, always make sure that you plan carefully so that you will still be able to save money while also repaying your loans if you have any. Never take out money from your savings to repay your loans unless it is highly impossible to repay it otherwise.
Your family and close friends should always be well informed about any liabilities that you have so that they can contribute and save accordingly so that there is less burden on you to repay the loan.
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