When not to take a loan?

01-10-2019

People are increasingly willing to use financial products, which are popular non-bank loans. Loans help to quickly overcome the financial crisis and finance unexpected expenses. The commitment is easy to contract, it is harder to pay it back. There are certain situations when we should not categorically borrow. What?

 

No fixed income

No fixed income

Unfortunately, many people who get non-bank loans do not have a regular income. The offer of loans without certificates is very large, so it is not surprising that there are many clients willing for such financial products. A full-time job provides a steady source of income. However, not everyone works on a contract of employment. Many people only take up seasonal jobs and occasional jobs. These, in turn, do not provide systematic inflows to a bank account. In some months you can earn a lot (e.g. during the holidays on fruit picking), while in others just enough to be able to survive at the lowest level. Therefore, people who do not have a stable income are not certain that they will be able to pay the liability on time. Customers who have difficulties with repayment most often reach for another loan for those in debt or apply for an extension of the repayment date. Both of these solutions generate additional costs. If work does not guarantee stability of employment, reaching for a loan may not be a reasonable solution.

 

Unpaid obligations – family and friends

Unpaid debts are a basic contraindication to taking another loan. We are talking here about ‘informal’ commitments from family and friends. The group of people who are willing to borrow money can quickly run out, and we will eventually be forced to give back the money borrowed. It is not worth reaching for a non-bank loan, knowing that one commitment is chasing another commitment. We should always be aware that there may be some unexpected expense on our way, e.g. a car breakdown or a family illness. We should not assume that, regardless of the circumstances, we will definitely be able to pay back the loan on time. Incurring one commitment after another is the first step to falling into a debt spiral.

 

Quick decision making – no time to find the best offer

Quick decision making - no time to find the best offer

Choosing a loan company is not one of the simplest tasks, but you need to devote some time to it. Online loan comparison websites that can speed up the process can be helpful. Nevertheless, we should have time to think about the final choice of lender. So if we don’t have such time, we should postpone the loan decision. A hasty choice may mean that we will not necessarily choose the best offer available on the market. The loan is uneven. Liabilities may differ from each other by many factors, including the amount of costs, repayment date, the possibility of extending the repayment date, etc. So let’s calmly look at the offers of loan companies. Online loan rankings and reviews of existing customers can also help.

 

Other liabilities at the bank or loan company

bank loan

Especially popular short-term payday loans are not a good solution if we also have other liabilities in a bank or loan company. The loan application may be rejected due to low creditworthiness. However, if it is accepted, we will be repaid with another commitment. Each, even the smallest installment of the commitment reduces the household budget. Rational management of household funds requires finding money for living, fees, bills, repayment of current liabilities. In practice, this may turn out to be a bit complicated when it turns out that we have limited financial resources. It is easy to get another loan, but it is much harder to pay it back.

 

A loan is needed immediately – what to do?

A loan is needed immediately - what to do?

Unfortunately, sometimes in life it happens that without another loan we will not be able to move. Thoughtful lending of money does not have to be a heavy burden for the household budget. You can spread the amount borrowed over the maximum repayment period, which will allow for lower installments of the liability.

In case of problems with timely repayment, we should contact Customer Service immediately. Let’s just say about your situation, trying to negotiate a mutually beneficial solution. A certain way out of this situation may be to extend the repayment period. This solution is worth reaching when, for example, our employer delays payment of remuneration.

A slightly different solution can definitely be the first free loan. If we give it back on time, we won’t have to bear any additional costs. In this particular case, however, you should be aware that a free loan is payday payday payable within 30 or 60 days.

Regardless of whether there are any contraindications to taking out a loan or not, it is worth thinking about borrowing money. It is necessary to analyze the financial possibilities of the household. An informed lending consists in incurring obligations when you are sure that they will be repaid on time.

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