Clever Tips to Make Sure You Borrow Without Extreme Risk

Advisor October 9, 2020

If you think you can be as casual as you want when using a credit card or borrowing money in any other way, my friend, think again! It might well be a trap you’re getting yourself into.

Wait, hold that flurry of thoughts, we don’t mean to confuse you. All that we meant to do is apprise you of the mistakes people make when borrowing money.

Everyone needs to borrow funds sooner or later, but unless you’re wise about it, you can end up paying much more than what you signed up for. To help you stay away from unnecessary debt pile-up, we’ve brought forth a few handy tips you must consider before borrowing money or using credit cards. Have a look.

Pexels | There are a few things you should take care of when using your credit cards or borrowing money

Interest-free loans might not be such a good idea

It’s not like you can keep the amount forever without paying any interest. You’re free from paying interest only for a certain period of time. But if you fail to pay the entire loan off within that time, the eventual interest rates are going to be very high. Thus, we suggest being completely sure of whether or not you can pay off the loan before borrowing.

Read – Uncovering the Truth behind Zero-Interest Financing

Try to pay more than the minimum

Here’s another super hack to successfully pay your loan. What if you manage to pay 10% of your credit card bill every month? You see, paying the minimum card charges will do, but it will take more time to pay off the entire card bill which anyways keeps piling up. Thus, you should try to pay slightly more than the minimum amount requirement.

Pexels | Aim to pay back more than your basic card charges, or else the bills will just keep piling

Overdraw your bank account?

Often, instead of borrowing money in the form of loans people just overdraft their accounts. You should know that doing this can make you pay several fees, and needless to say, you won’t like doing that.

Read – Here’s What to do If You Overdrafted Your Bank Account

Do your homework

It might be a good idea to research thoroughly before taking a loan. Even if it’s an urgent need, you should still put some time and effort into research. If doing that isn’t possible on your own, ask for help from your friends. One thing you should remember while doing your research is to try and find the returnable amount. Keep in mind that you can get a lower annual percentage on a shorter repayment period.

Are you signing up without reading?

Do you go through each and every term and condition before signing a paper? If not, you might easily get tricked. There are agreements with hidden clauses that you may not want to accept. Hence it’s necessary to read and understand everything.

Pexels | Before borrowing, research thoroughly about the lender and the involved clauses. Also read all documents before signing

Wrapping it up

While borrowing, you can easily get trapped into something you don’t understand or don’t anticipate. Thus, it’s of utmost importance that you be careful. A bit of research and expert assistance can help a lot.