It is easy to forget the consequences of taking out a consumer loan when you are in the store and have such a terrible desire for the latest mobile phone or handbag, but you may want to take a step back and remember that the loan sooner or later must be repaid. See selfservebacklinks.com of critique.
Do you really need the loan?
It is easy to say for yourself that it is good to take out a loan when you stand there and have a terrible desire for a thing. Then you may want to take a little time-out and ask yourself if you really need to buy this thing that you so desire. In most cases, the answer is probably no, and it is rare that there are any good, economic arguments for taking out a consumer loan.
A good rule when you really want to buy a thing is to postpone your purchase for a week or two. Then you will have an opportunity to think carefully and consider whether this is really a necessary purchase. Of course, this does not apply if you need the money for something critical, such as a car bill on the car or to pay the dentist to fix the teeth you got knocked out, but in most cases a consumer loan goes to what we might term as luxury consumption, and then You may want to think about it an extra time or two before deciding to take out a loan.
Make a proper calculation
Before deciding to take out a consumer loan, you should make a proper calculation of what the loan will actually cost you. The banks like (of course) to make the loans as affordable as possible, but in practice they are often much more expensive than the first impression. Keep in mind that the nominal interest rate you receive on the loan varies based on your financial situation, while the examples of loan costs that the bank shows you in their promotional material are often based on the bank’s most affordable interest rate. In other words, there is no guarantee that you will get the same interest rate, so it is extremely important that you do your own calculations so that you know exactly what the loan will cost you.
First installments are due quickly
When you take out a consumer loan, the first installment will normally expire in the month after you receive the loan. Some loans allow for one or more installment-free months during the year, but this usually requires you to pay down the installment for a minimum of 6 months first. In other words, you cannot take out a consumer loan and take out installment-free months right from the start.
It is expensive to have bad advice
A consumer loan is expensive, and almost no matter how you turn it around, consumer debt will have a negative impact on your finances. Not only do you have to pay off the loan each month, you also reduce your financial freedom because you increase your debt ratio, and you are thus more exposed to something unforeseen, such as losing your job or getting sick.