Just as a personal loan can give you peace of mind and serve as a tool for your financial recovery, it can be the trigger for more headaches. Whether this tool will be good or bad for you just depends on two things: realistic planning and discipline .
Without further ado, let’s get down to business: Today’s post will give you some tips and tools not to fall into the pitfalls of personal lending and to boost your financial situation . Come on!
Do I Really Want / Need a Personal Loan?
First of all, isn’t this tightening of the budget just a temporary thing, about two or three months old? Can’t hold the wave a little? Which do you prefer: spend a little bit of money now or pay interest over time?
Incidentally, sometimes cutting spending is not a problem. It is only to cut excesses and wastes that go unnoticed in the daily rush. Take a survey of your life and see where the money is running away!
In any case, only you, after reflecting on your situation, can come up with an answer to these questions. After all, each one knows the weight they can carry.
Special Case: Debt Refinancing
If you already have debt with very high interest rates (such as your credit card or overdraft), RUN AWAY!
“Ah, but talking is easy. How will I pay this debt ??
Making a personal loan! Usually personal loans have lower rates. Just to be aware, when you owe overdraft, you pay an average interest rate of 300% per year! When you “pay the minimum” on the credit card bill (the so-called revolving credit), the interest rates reach more than 400% per year !!!! (FOUR HUNDRED!)
Already the interest of personal credit are at 126% per year. It is still a very high rate, but it is already much lower than credit card nonsense. And also remember that this is an average: you can achieve higher or much lower rates than this.
Asking for credit card installments can also be a good option for braking the snowball. The average interest rate is 146% per year.
In any case, do a good price research first (click here to access our loan comparator) and talk to the bank. You can come to a good deal to refinance the old debt. Don’t be ashamed when it comes to your money: go to the agency and talk to a manager!
Banks sometimes have special conditions for clients who want to combine all debts into one loan. Besides being able to get a lower rate, it is much more convenient to pay everything in one ticket.
So if this is your situation, do not hesitate to make a new debt to pay off an old one. The principle is simple: if you can afford it cheaper, why pay more?