If there’s one thing you know if you’ve been an adult for more than a few years: it’s easy to borrow money. It doesn’t matter who you are or what your credit score is, there is someone out there who is dying to give you their money. Depending on your credit history, you might not have access to all of these methods, but you can be sure that there is one lender or another who has you right in their targets. This puts the situation in perhaps too adversarial of tones; there are plenty of perfectly good reasons to borrow money. The question is: is your situation one of them?
When deciding whether or not to borrow money, it is important to weigh a variety of factors in your head and on paper. 1) Can your financial goal be achieved any other way than borrowing money. 2) Can you repay your loan comfortably, or even early? 3) Have you explored all of the options available to you? We’ll look at these three questions below.
- Can Your Financial Goal Be Achieved Any Other Way Then Borrowing Money? Nobody can answer this question but you. Sure, in the short term borrowing money is the easiest way to get from point A to point B, but it doesn’t mean it is the most wise. Sometimes you might be able to make your goal happen by taking on more hours at work, starting a side hustle, or otherwise supplementing your existing income. In another case, you might be able to partner with someone who has the same goal is you, and share the thing you are both investing in. There are endless variations to this. Because you know your goal well, you can probably imagine more. Take the time to explore all your options and make the decision that puts yourself in the best financial situation.
- Can You Repay Your Loan Comfortably, Or Even Early? It’s important not to borrow money if you will struggle to pay it back. Australian no credit check payday loans are certainly available to you, but they are only a good idea because you know that you have money coming in in just a few days to pay the money back with. For people who have no real means of paying back a future loan, it is very poor decision making to borrow that money. The best case scenario is that it ruins your credit. The worst case scenario is that it is one step in ruining your entire financial life. It’s important to take out loans that you can afford without straining. It’s also important to find loans that won’t penalize you if you pay them back early.
- Have you Explored All of Your Options? When borrowing money, there are probably more lenders available to you than you have investigated. Talk to your bank, online lenders, as well as regional private institution to make sure you get the best available terms.
Borrowing is an important part of an adult’s financial life, but it’s not always smart to borrow. Make the right decisions about borrowing by asking the right questions.