Handy Tips to Consider when Borrowing Money
This article gives a few reminders when it comes to borrowing – be it in the form of a loan, a credit card or a mortgage.
Shop around, and research on the best deals available. Ask for advice from friends, or on reputable message boards for the most flexible offers. You might think that it eats up too much time, but the price of not looking around and going for the first deal you see could be most costly in the long run.
Calculate the total amount that you will owe if you are borrowing money. While having to pay off a loan in a shorter amount of time may be heavy on your budget, but it also means that you will be subject to a lower Annual Percentage Rate or APR.
Know the differences that make secured and unsecured loans. The former means you could end up losing properties if you are unable to meet payments.
Set up a budget plan before borrowing and factor in the repayments to ensure that you can afford it.
Be careful about borrowing only to pay off your existing debts.While it might seem like a good idea and may be a good short-term solution, it may end up creating long-term problems for you.
Be careful about interest-free deals. These are only free of interest if you can pay them off within a short time period. The inability to do so means that you will end up paying for a high interest rate.
Try to pay at least 1/10 of your credit card balance every month.If you only meet the minimum, you could end up paying forever.