Two of the focuses of my blog are Financial Literacy and Money. In some instances, it’s important to know when to take out a loan if there is a financial crisis and there are no other options left. The following contributed post is thus entitled; Know When To Call Upon The Power Of A Loan.
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The rut of financial baggage is relentless and tiring. It happens to us all at least once through our lives, but because it can go on and on, we feel like it’s normal. Well, newsflash, it isn’t and no one should ever think that it is something we should be okay with either. Firstly you need to pinpoint the reasons as to why you are in this mess whereby you can’t seem to pay your bills on time, you’re cutting back on the things you need for your family such as groceries and clothes, and yet still here you are sat up late at night with a calculator in your hand. Life shouldn’t be a game of catch up but it ends up being that way when we are irresponsible with our finances, going in over our head and getting into debt. Slowly but surely, if you cannot seem to stop the ball of debt and financial burden from rolling, eventually it will roll over you. But when is it really the best timing to go for a loan to help alleviate the pressure?
Human beings are just strange creatures at the end of the day, we mostly cause our own problems. It’s hard to admit but you need to seriously question if you’re living a life that you honestly should not be. Have you bought a car that looks and feels good to drive but the gas mileage is pathetic? Do you buy too many clothes just to look good at events that don’t really matter? Could you possibly be a little too passionate and keep buying tickets to your favorite sporting team’s matches? We need to stop living lavishly when we know we don’t have the money. Many people will try to make excuses such as needing to feel good about yourself when you’re sad and depressed, or trying to live a normal life for the family etc. well, tough luck, it’s time to seriously question whether you should be buying some things when you know you are in a pinch.
Do you have a plan
What if you had a bag full of money thrown at you, what would you do? Just for the sake of argument, it’s only enough to pay off your debts and start to control your finances. Do you know what you would do first? What bills, debts, credit cards and such would you pay off immediately? If you haven’t even thought about the long-term solution to your financial burdens, your short-term plans are almost nonsensical. Paying off this week’s debt is a single drop in the ocean, what about the tens of thousands of dollars you owe for your mortgage, car payments, phone contracts and more? Create a plan that deals with a point by point analysis of what is most important financially, and then come up with monetary rules for paying off those problems first and foremost.
Measure the deepness
Loans are a great financial tool to use when you need to just throw money at the problem to make it go away. They do provide you with a lot of power to end some financial crisis situations, that much cannot be denied. But, they come with their own set of rules as they are a solution but also a new addition to your financial responsibilities. Use this information that compares direct lenders only and see what kind of APR rate and interest is best suited to you. Some lenders charge high rates as they want to aggressively control how and when you start repaying them. Others are more open to allowing you to figure out what the best plan would be. You can get a small loan of around three to four figures or you can get into the five-figure sums if you need a large quantity of cash.
Take the hit
No one wants to dip into their savings account to get from under a financial jam, but you have to be willing to do so. If the worse comes to worse, then you need to set a limit on how much you will be eating into the money you have been saving all your life. Take the hit and stop yourself from going under. Filing for bankruptcy is going to be much worse than halving or completely devouring all your savings. As much as it hurts, set a plan in place for how much money you will take out of your savings account to help pay for your debts. Setting a threshold for how much money you have left in your main bank account is a common way of doing this.
Loans have the ability to put a large chunk of money right in your hand, in a very short amount of time. Therefore they have a lot of power to aid you in your financial troubles. However, know when you need to call upon a loan and devise structures so you make good use of the money.