(ThyBlackMan.com) Most people associate loans with lack of proper planning, and this is partly because a lot of people take loans without necessarily needing them or for the wrong reasons. Of course, there are plenty of responsible people take loans with legitimate reasons, but the question that emerges from this is, should you ever get a loan?
The answer to this question largely depends on the reason for taking a loan. Sometimes life can back someone or business into a corner, that, without financial support the only things that come next is lagging behind others. Yes, there are circumstances where taking a loan cannot be avoided, but in some cases, taking a loan doesn’t make sense.
If you can easily afford to pay back, take the loan
It’s a no-brainer, you should only take a loan when you can pay it easily. Do not tell yourself that there is always a way to make ends meet; that will be a terrible mistake, one that you will come to regret. If you can be able to squeeze your budget right now, then do it.; if you have to get a second job, or start some freelancing work, do it before you consider a loan you cannot afford to pay quickly. Instead of thinking about monthly income, think about paying extra, and if you can afford to pay extra, then take the loan.
If you are buying something important
It would help if you never took a loan to finance a lifestyle that’s beyond your means. Take a loan only when you need something, not when you want it. Borrowing money is a critical undertaking, it can help you, but it can also hurt you. If you need to go to work every day, then it is a good idea to take a loan to purchase a good functioning car. If you live in cold areas, then you need a furnace, and getting a loan is important since some of these necessities can’t wait until you accumulate enough to purchase them.
If you can you pay the loan early
Sometimes, you may be expecting some money in the near future, but since you do not have it just yet, it would be a good idea to take a loan to cover important expenses that can’t wait. Remember, however, that even though paying earlier has many benefits, some loan types have prepayment penalties and tax implication, so make sure you ask credit counselors about such implications.
What will happen if you can’t pay off?
Consider the long-term effect if you fail to pay the loan, for instance, if you lose a job, or lost your primary source of income. Of course, we all get struck with financial difficulties from time to time, and installment loans may be needed, however, consider the effect this will have on your life when you fail to pay. In others, don’t take a loan if you can’t pay after losing a job.
Before you sign on those dotted lines, you need to have a valid reason to do so; otherwise, you may come to regret later on. Do should you ever get a Loan? Yes, loans are necessary to meet financial goals, but, you must have a valid reason to ask for one. If you need it if you can live fine without it, if you can pay your loan early, if it makes sense financially, then there is no reason you shouldn’t get one.
Staff Writer; Ron James