As a rule, a loan helps you to finance larger purchases without problems or to bridge short-term financial bottlenecks. But under certain conditions and in certain life situations, you should be careful not to take out a loan. Find out here when a loan has a significant risk potential!
Caution is an unsafe life situation
Are you worried that your employer will soon cut jobs and that you may lose your job? Then you should under no circumstances take out a loan. The same applies if you separate yourself from your spouse and you can expect significant maintenance payments in this connection.
These situations lead to a high probability that your financial performance will deteriorate significantly. Then it is hard enough to meet your recurring obligations, such as rent, ancillary expenses and insurance premiums, month after month. In the worst case, additional financial burdens for the repayment of a loan can lead to overindebtedness.
Stay away from dubious providers
Are you already in a tight financial situation, so that banks and savings banks reject your loan applications because of a lack of creditworthiness? Then you should leave it at that because rejection is not without reason! Under no circumstances are you well advised to take out a loan from a dubious provider now. You can only get loans here on unfair terms. Excessive interest rates or inadequate guarantees, such as the joint liability of spouses through a guarantee, put you at a disadvantage as a borrower.
Instead of agreeing to these conditions, you should initially refrain from borrowing and work on improving your credit rating.
Warning: Again and again, consumers are asked by dubious credit intermediaries to pay in advance for processing. So before you get a loan, you should already pay. In many cases, you will not receive any funding afterward and the processing fees will be gone. Under no circumstances respond to these offers!
Bruin for consumer spending? Better to do without!
Taking out a loan is a bad idea under certain conditions, even if your financial strength is great and you can easily get a loan. Excessive consumption on the pump always leads to a financial overload sooner or later. Think carefully about the purpose for which you are borrowing.
Without a doubt, it makes sense to get a reliable car for the daily commute to work with a loan. On the other hand, it is less advisable to finance an expensive lifestyle with credit cards and Good Finance. This example shows how expensive the constant use of Good Finance is:
- Average usage: 4,500 dollars
- The effective interest rate for overdrafts: 12.5 percent
- Annual interest charge: USD 562.50