Anytime you borrow money , finance a purchase , or take out a loan , you should carefully consider if it is the right decision for you . Borrowing money means that you are committing to pay the money back within a certain time frame and at a certain interest rate , according to
www . thebalance . com .

Before signing on the dotted line , you should consider how borrowing money will affect your finances in the future . You don’ t want to gamble and guess at whether or not you can afford the payment, how it will affect your debt- to- income ratio , or if it fits into your budget .
So while it may be tempting , ask yourself these five questions before you take out that loan .

Is this purchase necessary right now ?

Often , things that seem necessary really are not . You can postpone most purchases until you have saved up the money to buy them in cash, rather than financing or taking out a loan .

For example , while it may not be convenient to go to the Laundromat to do your laundry , you will save money by paying cash for a new washer and dryer . If it is for something that is recreational , such as a boat or jet skis, you really can save up the money to buy the items , because they are not necessary purchases. If it is a larger purchase like a new car, consider buying a used car instead to save money . You may even save up the money more quickly than you expect because you are motivated to make those purchases.

Can I purchase something less expensive instead?

Often when you are making a big purchase , you will want to buy the nicer model . But it may be smarter to scale back and buy a used version or lower model instead .

For example , if you are purchasing a car, you may consider getting a more basic model , or , as mentioned, buy a used car instead . Whatever money you save , you can then use towards saving and investing instead .

Also worth noting: It is important to do your research on major purchases so that you know you are getting the best value for what you can afford to spend . This does not mean that you necessarily buy the cheapest item available , because you do want something that will last and be worth the price . Doing research can help you determine the best option at the right price point .

Continue Reading: https://www.hgsmediaplus.com.ng/2019/01/what-to-consider-before-taking-loans-in.html?m=1

Cc Lalasticlala
Cc mynd44
Cc MissyB3
Cc Dominique
Cc Fynestboi
Cc Seun