There are tons of reasons why moms are tempted to get a loan. Aside from the urge to get a mortgage for a home and another loan for a car, there’s always the sky-high tuition fee to pay – and worth investing on, then there are those times when the monthly income isn’t enough to cover expenses, and there are also times when emergencies arise and money becomes a scarce commodity. In such cases, getting a loan is almost inevitable but if you’ve already waist-high deep in debt, ask yourself the following questions before you get another loan…
Can you really pay for the loan you are making?
Cut the habit of getting a loan to pay for another loan because you’re digging a hole in your pocket – and sooner or later, you’ll hit the B-ottom – Bankruptcy. Only get a loan if you really have the means to pay it – and you’re sure you can. Think about your monthly income and compare it with how much you usually spend in a month. Will there be any extra money left for you to use in paying the loan you want to make?
Is there any other type of loan that will cost you less?
There are many types of loans out there. There are car loans, renovation loans, home loans, business loans, payday loans and more. Each type of loan comes with a different set of terms – and by terms, I mean the interest rates, the loan due date, the penalties, and more. Compare every single detail and determine which type of loan really fits your needs and your capabilities. Keep in mind that most goal-specific loans carry more benefits and lower interest rates that would really meet your goals.
How fast will you be able to pay off the loan?
Always remember that your debt grows bigger and bigger the more you [delay payment for your loan. You will also incur fees and fines whenever you miss payment deadlines. So, you better take out a loan only IF you can pay it as quickly as possible and you don’t have other debts to focus on. You have to realize that you won’t be able to save anything or invest in anything if you just waste your money paying off loan interest and fees.
What will happen if you won’t be able to pay your debt?
There are many undesirable consequences when you don’t pay your debt on time. First, there are fees you would have to deal with – and those fees will make your debt bigger and bigger. Second, any late payments or skipped payments will affect your overall credit score and that bad credit score will affect your chances of getting a home mortgage, a car loan, a business loan, and perhaps even getting a job in the future. Worse, if you have placed anything in collateral, you will lose your property.