5 Tips to Manage Your Personal Loans
Many people are afraid of having loans. They view this as a big red flag in their life but the thing is loans can in some way help you if managed correctly. In a time of recession and when there are tons of online lending apps available and even some are malicious, you have to be very careful.
Let us share with you 5 TIPS TO MANAGE YOUR PERSONAL LOANS.
What Are Personal Loans
Personal loans are any money you owe either to a private individual or an institution that will be used for personal reasons. Reasons for acquiring a personal loan can be for your immediate expenses, educational needs, medical needs or even to buy something that you like to purchase.
Again, there is nothing wrong to get a personal loan as long as you are sure that you can repay them. If you are having doubts about this primary rule then you should not take out a loan at all. Remember that your credit should be protected and also avoid any problems in the future.
5 Tips to Manage Your Personal Loans
Tip Number 1. Do You Really Need A Personal Loan?
The first question to ask yourself is do you really need to take out a loan? Don't you have any other source of income or resources which can be used for the purpose of your loan? This is very important since it will be the underlying factor in this major decision.
If you want to pause for a minute and think about it, you can check out creditloan.com, a site that provides education regarding loans and personal finance. Educate yourself about personal loans and how you should be ready with this decision and then return to answer the question if you really need the loan or not.
Tip Number 2. Loan From Reliable Sources Only
You need to remember that if you are getting a personal loan the source of this loan should be reliable. If you are getting it from a friend then trust is the number one factor. Your friend will lend you money based on trust and always repay that loan at your agreed time.
If you are getting money from an online lending app, be sure to always check reviews. Reviews are very important since there are lots of abusive online lending apps which charge extremely high-interest rates. In the Philippines for example there is an online petition to stop abusive online lending apps since most of the apps are abusive and even charge interest rates as high as 40% for a 7-day loan.
Tip Number 3. Inform Members of Your Family
Do not forget to inform other members of your family that you are getting a loan and whenever possible ask their opinion about it. You never know, perhaps they will just lend you the money and it will save you the trouble of incurring a debt somewhere else. Of course, for some asking for help within the family is also a different story altogether.
Tip Number 4. Save for Repayment
Remember your schedule of repayment and save money to repay your loan. Most people only remember the time they take out the loan and then once they spend it they forget about the responsibility of repaying them especially when they are borrowed from friends.
Online Lending Apps and credit institutions will charge additional fees and interests for every day that is delayed starting from the due date. There is also the report being sent to the Credit Information Corporation which can affect your future credit rating in the Philippines. In the United States, this is called the FICO Score which affects your credit worthiness.
Tip Number 5. Do Not Make It A Habit
Finally, always remember not to make it a habit to rely on personal loans every time you encounter a problem. Find a better-paying job and do proper budgeting. It might be easy at first to rely on personal loans but as more loans file up, it can turn into a nightmare that you cannot wake up.
Read or watch personal finance education online which you can easily search on Google or Youtube. Be responsible enough to focus on things that are needed and less on things that are just for show or for your wants.
In the end, managing your money is key to living a healthy and happy life. Incurring a personal loan is never a problem nor it is bad, you just need to be responsible.
ABOUT THE AUTHOR
David 'Master Pogi' D'Angelo
Social Media Specialist | Blogger |
Environmental Advocate | Events Organizer
