Keeping control over your finances can be difficult, especially in these economically challenging times. There will inevitably be a point in your life where you may need to borrow money to make important payments, so being properly educated and equipped to make the right call is therefore hugely important. Here is some advice for those considering borrowing money.
Avoid wasting assets
You should try to avoid borrowing money to buy things that will not produce any income or worse, drain your income. Wasting assets can be anything from holidays to a new car; they are an unnecessary cost that should never be borrowed for to attain.
If it is hugely important that you do borrow money to buy a new car (for business purposes for example) it’s equally important that you borrow sensibly in order to buy it, making sure that the way you borrow leaves you with the most manageable debt to repay.
Use a credit card
There are a number of 0% interest credit cards out there that can help you make payments. 0% interest cards will normally give you 12 months of 0% interest on all your transactions or balance transfers as long as you meet your minimum monthly payments. Provided that you can pay them off, ideally at the end of every month. these cards are a great way to cover the costs of your day-to-day spending.
Making sensible use of a card will give you more flexibility, meaning you can deal with large bills that come out of the blue. On top of that, if you are responsible and quick to pay off your card debt, you can beef up your credit rating.
To reinforce the point, credit cards, managed well, can be beneficial. But fail to pay them off before the initial low interest rate ends, or fail to make repayments, and they can see your debt spiral.
There are a number of different credit card options, suitable for different financial needs, so be sure to compare credit cards to find the right solution for you.
Don’t borrow from friends and family
It can often seem like the best and most convenient way of borrowing money, but borrowing from friends and family is normally a bad idea. Unless the loan is agreed in a fully professional manner, it can lead to many disagreements and possible ending of friendships. Taking loans from proper institutions forces you to take your finances seriously and make payments on time.
Never risk your home
Losing your home because of missed loan payments can heart breaking. You should avoid any form of loan that is secured against your home; you will be surprised how many loans include this in the small print, so do your research! You should only be taking out loans against your property to pay for improvements or extensions to your property because they can add value.