The basic questions that arise in our head, along with the idea of taking a loan or credit, are above all how and where. However, we should always start with whether we really need a loan, whether we can afford it and how much we can spend on it monthly. So from the beginning.
Do I need a loan
When we come up with the idea to get into debt, we should ask ourselves – do we need credit? Yes, everything is for people, and the credit institution was created to help us make larger purchases or investments. Unless we can afford to buy for cash, we can easily repay the installment (we can afford to pay the installment).
However, let’s think about the purpose of the loan. We must remember that nothing is for free. We have to pay for each loan. Thus, we always give more than we borrow and it is usually a large percentage of capital.
In this situation, is it not better to refrain from buying and save money for the purchase of a new phone, computer or TV equipment? Of course, we find the situation when we can’t wait with the purchase. However, it doesn’t hurt if we think about it every time.
Can I afford a loan?
Another thing we need to think about is whether we can afford to pay back the loan. We are always absorbed in the whole procedure, completing the necessary documentation, vision of a positive decision and what we will allocate the funds to.
However, we forget that credit is not only a plus, but also a financial liability, often for many years. Let’s think very carefully, then, whether adding another expense, in the form of a loan installment, will not strain our home budget.
Why installment is important
That is why it is so important to adjust the installment amount to our financial capabilities. If we carefully analyze and calculate both our regular revenues and expenses, we will be able to determine how much more or less we have left. In this way, we will determine the amount of the monthly installment that will not be charged to our budget.
This, in turn, will allow us to avoid any inconvenience related to the lack of funds for timely repayment. The loan installment will blend in seamlessly with our monthly expenses. Timely repayment will not be a problem for us, because before we decided to take a loan we thoroughly analyzed everything and we made our decision based on our financial capabilities.