Be aware of

Be aware of

22 December 2011
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One of the most common mistakes made with getting a loan is not being in the financial situation to repay them each month. Forget how much you need to borrow for a second and ask yourself what disposable income you have each month. If you don’t have any and your outgoings are more than your incoming, you will not be able to repay your loan.

So you need to take a step back and reduce your outgoings, look through your monthly standing orders. Even your contract mobile phone maybe something you need to get rid of if possible. Gym membership, sky packages, health insurance, landline phone and weekly shopping habits. Reduce your outgoings before you get a loan.

Avoid the ‘payday’ loans because that is just admitting defeat and delays financial disaster. Most are just for £250 so better borrowing that from a relative for 3 weeks than paying a company that charges 4000% in interest if you default.

Once you have worked out that you have reduced your outgoings and now have a disposable income, now you can start to multiply that over a 1, 2 or 3 year period and work out what repayments you can afford.

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