Why you should avoid taking a loan

Many of us fall into a debt trap just for the fact the easy availability of debt/loans. We saw something in the market and it says you can get it financed easily so we take a loan, we have a travel plan and instead of saving up for it we take the easy route out by just taking a loan. Getting Married want a dashing ceremony easy take a loan. And at the end of it all we see that most of our income is going into paying those loans like the EMI for the House, EMI for the Car, for the refurnishing of the house and all other kinds of loan we can come up with. The overall impact - you tend to save less, your always thinking about money, your retirement kitty is down and all those things with a lot of tension. We should

1. Be very conservative about taking a loan.

2. A loan should be taken for which we can afford paying the EMI. It should not be more than 20% of our monthly income.

3. If we are planning to take a loan for marriage, we can either delay the big day or just plan something we can afford.

4. A loan for just refurnishing you house is not a sensible thing to do. We can maybe just have furniture we can afford.

5. Avoid as far as possible to keep any credit card debt. This is the biggest sin of them all.

6. Personal loans should be avoided as far as possible, since they have a very high interest rate and we generally tend to take them for expenses we can avoid.

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Anonymous said...

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Roy Peter - Financial investment

Tracie said...

Good post ...Its time to change our beliefs around money because its our own belief that feed our behavior. Money management help

Jorge said...

I totally agree that loans of all sorts should be avoided in order to keep debt down as much as possible. Often loans become a huge nightmare and only snowball to something bigger than one can imagine.

Xlife income insurance said...

I think that you need to consider everything carefully before you decide to take a loan from someone. Thanks for sharing.

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Kie said...

Thanks for the tips. I could only suggest talking to mortgage modification lawyers if you are currently suffering from credit debt.