The 10 Commandments Of Responsible Loan Taking

Part 2

Securing a loan is easier than ever before. Modern technology allows you to do it in minutes. Blah blah blah. We’ve written this before, and if you’re reading it for the first time, you need to read something else first. Click here for Part 1 of “The 10 Commandments”.

Done with Part 1? Good. Keep reading. Once you’ve finished, you can use the little blue buttons to find offers that may suit your requirements. But finish reading before you start shopping.

6.Thou shalt keep shopping for better rates.

(Look for better rates even after getting the loan.)

Interest rates are not stable creatures. There are always new rules and changes among them. Even after securing your loan, keep your ears and eyes open for better rates so you can switch to a cheaper loan if possible. 

7. Thou shalt read the fine print carefully.

(Read the fine print to avoid getting screwed.)

Lenders are notorious for adding terms and conditions, clauses and goodness knows what else to already boring documents that are incredibly technical and difficult to understand. As a result, it’s quite easy to get deceived by the actual terms of a loan. If you’re not comfortable with financial jargon, ask a financial advisor to take a look at your paperwork before you sign that dotted line.

8. Thou may substitute high cost loans.

(Try and replace expensive loans with cheaper loans.)

If you have too many loans in your name, identify the ones that are costing you the most – and see if they can be replaced with cheaper options. For example, an unsecured personal loan may be replaced with a loan against life insurance policies. Another thing to keep in mind? Always pay the most expensive loans off first. Always.

9. Thou must keep the golden years gold.

(How will your loan at 40 affect your lifestyle at 60?)

Many parents are so busy taking loans for their child’s education, they have no money left to save for their own retirement. Growing old isn’t cheap. You won’t have a regular income. You’ll have staggering medical expenses. And your insurance premiums are going to be sky high. Make sure you chart the life of every loan you take. It shouldn’t interfere with your life years from now.

10. Thou should not keep secrets from thy loved ones.

(Don’t take a loan behind your family’s back.)

Apart from the fact that they – at least, your partner if no one else – have a right to know, it’s a dangerous thing to do. Something might happen to you, leaving your family saddled in debt. (See rule 5.) Or your partner may make certain decisions based on the assumption that you may be able to take a loan in the future. (Not realizing you’re about to take one now.) Transparency at home is a safeguard that no bank will tell you about. But it is a safeguard you definitely need.

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Charlie J. Thompson
Charlie is a financial analyst turned writer His mission to provide general knowledge about the world of finance to help people from non-financial backgrounds make informed financial decisions.

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