With taking out a loan you make a decision for the longer term. You have to pay interest and repayment every month during this time. Borrowing is therefore something to think about. What are the pros and cons? Are there alternatives? The bottom line is that if you are going to borrow, this loan must be well attuned to your (future) situation. We call that ‘conscious lending’.
Save or borrow money?
If you can pay a purchase with savings, you do not have to take out a loan – and therefore do not pay interest. But what if you need a new car without sufficient savings? Or for unexpected costs? If you are unable or unwilling to postpone a publication, a loan can offer a suitable solution.
Provide insight into your finances
If you are structurally short of money or you have payment arrears, first check your finances before you start borrowing. For example, by keeping a housekeeping book. You can find more tips on www.nibud.nl . As a rule of thumb, you should always be able to save something every month in order to cope with unforeseen expenses. Do you want to borrow to repay other loans? It is also important that you have a good understanding of your income and expenses and a clear picture of how you will repay the loan amount. Incorporating and accommodating loans from one party is often a sensible choice. You are usually more profitable.
Which loan do you choose?
The next step is to choose the right loan that suits your purpose. Do you want to remodel your home? Then a Personal loan is a good solution, because of this the interest is tax deductible for a renovation. Always make sure that the term of the loan does not exceed the life of your purchase, regardless of your loan goal. Do you want to borrow with more flexibility? Then a revolving credit is an appropriate form of loan. You agree a credit limit and you can withdraw money up to that amount. If you do not accept anything, you pay nothing. If you withdraw an amount (in the meantime), you pay a variable interest. This is often cheaper than being red on your payment account. Read here about the difference between a personal loan and a revolving credit.
Keep borrowing responsibly
You know which loan form best suits your situation and you take out a loan. Then regularly check whether you are still responsible, because your personal situation may change. View the video about the Responsible Lending Scan and let us do a scan for you without any obligation and free of charge.