A loan can be a salvation during various financial problems, such as illness, loss of job or unexpected renovation. There are many other reasons for taking out loans. The most important thing, however, is to use such financial assistance in a thoughtful way and be aware that the loan should be repaid on time. It is also worth adding each installment to the planned budget for the next month. How to plan the repayment of your loan and what to pay special attention to so that it is safe and convenient to take out the loan and does not bring any unpleasant consequences? Here are the most important rules for responsible lending.
When is it not worth borrowing money?
The main reason for giving up a loan should be that you are unsure whether you can pay it back. Also, if you do not have a stable income, you should not opt for this type of financial support. Another thing to avoid is taking loans to pay back previous ones – the result of this action may be falling into a so-called “debt spiral”, from which it is very difficult to get out. In such cases, a much better solution will be to thoroughly analyze your expenses and look for savings – for example, you can start cooking at home instead of eating out, or replace the products you buy with cheaper substitutes.
However, if these methods are not enough, you can opt for a loan. In this case, it is necessary to calculate with great accuracy whether savings and tightening the belt will allow for its timely repayment. It is also worth remembering not to succumb to modern trends too much and not take, for example, a loan for a computer or a new phone when the currently owned equipment is still fully functional. Meticulous putting aside money is a more effective way to get your dream gadget. However, if you can regularly put down certain amounts, it means that paying back the loan should not be a problem. In this situation, you can think about buying the selected item thanks to the funds obtained from the loan.
How to borrow safely?
It is a common mistake to focus on the offer of only one lender – a better idea is to compare loan offers from different companies. However, you should not take into account only the commission for granting the loan. Also important are: repayment time, installments and the total amount to be returned. For some people, a long-term loan with small installments may be a more interesting option, the cost of which will be quite high. Others will choose loans with a shorter repayment period and thus lower costs. In this case, however, it should be remembered that even the slightest delay in repayment and exceeding the deadline may result in unpleasant interest for the portfolio.
What amount should I apply for?
Specialists usually recommend taking a slightly larger loan amount than you currently need. This will be a kind of security, which can be helpful if an unforeseen situation arises. A larger amount of funds may also be helpful for the borrower when suddenly his monthly expenses rise sharply.
What are the rules for responsible lending?
On our site Peter Pan.pl you can check all offers of non-bank loans. However, before you complete your loan application, read our “responsible lending rules” that will help you avoid getting into trouble in the form of uncontrolled debt. Following similar rules gives you the opportunity to use financial products with greater awareness and freedom.
- Think about whether you really need a loan? Remember that the money you borrow today will have to be returned along with costs such as interest and administrative fees. The exception to this rule are companies that offer the first loan at no additional charge – subject to timely repayment. Loans cannot be used as a source of financing current expenses, as it may increase debt and make it difficult to recover.
- Read the loan agreement before deciding to conclude it. On our site you will find information on loan conditions and a number of different financial guides. Carefully analyze all the points of the contract, especially if you want to borrow a larger sum.
- Do not suggest too much about the sample APRC, just use the loan calculator and information form available on the lender’s website. Please note whether the site has information such as: “As a result of the analysis of your creditworthiness, we can offer you a final offer with a higher interest rate or fees, a higher monthly installment and a smaller principal amount.” or “The above forecast does not constitute an offer within the meaning of the Civil Code.” If you find such additions, it will mean that the calculator does not present the real terms of the loan.
- Keep in mind that every lender is required to provide information on the cost of the loan before entering into a contract.
- If you have trouble paying your debts, contact the lender as soon as possible and tell him your situation honestly. Each loan company is interested in timely repayment of subsequent installments, which is why it can agree to change the terms of cooperation to those that are more favorable to the client.
- Remember that you have 14 days to withdraw from any contract concluded online, including a loan contract. If you have changed your mind – you can terminate the contract within the aforementioned two weeks.
- If something is unclear to you, just ask. The information line for loan companies is to help you understand every aspect of the contract and the terms of cooperation.
- Never pay back another loan. Such actions are a simple way to get into financial trouble and a “spiral of debt”.
Remember – borrow responsibly