We often want to frame the comfort of our lives by borrowing money from a bank. Credit offers are more and more interesting and tempt with their attractiveness. Thanks to them, we can afford to buy new equipment, renovate an apartment, buy a car, and even buy a flat or a house, even if we can’t afford it and we don’t have enough cash.
As it turns out, there is nothing wrong with borrowing money, taking loans and buying goods in installments. However, we must make these decisions consciously and responsibly so as not to become a victim of the lender. Each decision on a loan should be carefully and carefully considered, and the amount of credit taken must be adapted to the borrower’s financial capacity.
Think about your decision
We should carefully examine every decision related to borrowing money. And before we take it, we must check whether we can afford a loan. We need to be sure that we can control our expenses and receipts for our home budget. This will not only have a beneficial effect on our creditworthiness, but certainly also throughout our lives. Expenditure control will allow more informed consumer decision making.
We must also take into account whether our financial situation will change in the next few years when we are forced to pay back the loan installments. Certain events, esthete, we are not able to foresee especially when it comes to these random events such as illness or job loss, but we should be particularly allergic to some things, ie those that may be evidence of our material situation.
Look carefully at the offers
Before making the final decision, let’s carefully review the offers of all financial institutions. We must be aware of what loan we take out, and above all know its costs and the regulations that govern it. Let us remember that when making a decision on a loan, we should not be guided by what the posters and colored advertising leaflets of banks tell us, this interest rate is usually minimal and in reality it may look completely different.
For us, the most reliable will be the real interest rate, which will include both nominal interest rate as well as commissions and fees. Some banking products may also be additionally insured, which also affects the final cost of the loan. Only all these elements make up the total cost of the loan, which is the most important for each borrower.
Let’s not get into the debt spiral
We need to know that the less thought-out our credit decision, the greater its consequences may be in the future. If we do not analyze our current financial situation, we may fall into a so-called debt spiral. This will mean that if we want to repay one commitment, we will incur another.