Questions to ask yourself when you are looking to borrow money.
Evaluate responsibly and be careful what you sign. The situation is delicate and, coupled with the fact that households throughout Mexico tend to borrow heavily, there is a growing concern that the increase in consumer debt is driving the country into a new financial crisis.
So who is going to handle and handle the situation? The truth is that we all need to educate ourselves better financially. We should not aspire to the latest temptation in sales to “buy more than we really need” or interest-free credit products that only delay the inevitable need to pay.
Questions to ask yourself when you are looking to borrow money
The first should be “Do I really need to borrow this money?”, And not “Where can I borrow from?”
If the answer is yes, then accepting the loan responsibly is half the story and offering responsible loans is the other half.
When considering asking for a money loan, you need to ask yourself, “Why do I really need to spend this money? Is it a luxury or a necessity?
It is a fact of life that most of us have to borrow money from time to time. But there is a difference between taking out an emergency loan for an unforeseen expense, such as an urgent visit from a plumber and asking for a loan based on lifestyle, such as enjoying the latest fashion in dress.
If it is a necessity, try to find cheaper options first. If it were a luxury expense, would you be happier to be without it, knowing that you are debt-free as a result? How long would it take to save, instead of another option? Wouldn’t it be great to see you approaching that magical point when you can say “I can afford that now”?
Ultimately, the loan is a two-sided process: the one who applies for the loan has the responsibility to pay it in a timely manner, and the lender must be open with the applicant in case he cannot pay it on time.
The lender has a number of responsibilities. These include legal, but also, social and ethical responsibilities, as a transparent explanation of all charges and fees. It should also be explained what happens if the applicant cannot comply with the agreed payment plan. The lender also has an ethical responsibility beyond the legal requirements.
In the past, some single-payment lenders have fallen short on this issue and traditional lenders, such as banking institutions, have come out with the burden of equally exorbitant overdraft expenses, but with the impression of being a highly respected traditional establishment.
So what is the lesson?
First, we have to take responsibility for our own indebtedness, regardless of who we borrow. You should always read the contract before accepting a loan and you must be prepared to have to pay additional charges if you forget the timing of the payments. When payments are forgotten, the expenses related to debt management are increased.
If you need a loan, either short or long term, choose a company that does not hide behind the fine print, and remember, YOU are the customer.
So, if you choose to take a loan you must be smart and consider the true cost of the loans.
Carefully contemplate the amount of the initial loan and the duration of the loan term.
Can you afford to be in debt for a couple of weeks instead of a couple of years? What about the frequency of payments? Will you be paying in pieces every week? Are you expected to pay for everything at once? Are there any hidden payments at the end? Will there be times when you don’t find it so easy to make those payments?
Another important factor is the interest rate you will be charged. This can be complicated and you should ask your lender to be very clear. Some short-term consumer loan companies seem to charge high-interest rates on an annual basis, but in reality, because you are only applying for small amounts for a few weeks, it can become very profitable compared to the traditional means to which the People are more accustomed.
Take other charges into account
Some companies charge a fee set for “handling” the loan, as well as interest. Others will charge for late payments, lack of payments, or even prepayments! Check out the other charges that your lender is making. Sometimes these They can be much greater than interest, or even more than the loan amount itself!
Therefore, before taking out your next loan, ask yourself if you need it. Then ask yourself if there are better alternatives. If you still need to borrow, research lenders well, make sure you understand the true costs of the loans and go for the smallest loan needed.
Remember that in Good Finance Mexico we are here to support you when you need it most. Our personal loans are simple, fast and completely secure. Enter our website or download our application and enjoy your first loan without interest or commissions.