Over three out of every five people we meet fight battles with the debts. Many of them start taking some random loans to fulfill instant needs and where they end up after some months or a year is totally miserable. Well, to help our readers in tackling such problems, here we came up with few fundamental yet productive tips to overcome the stereotypic troubles.
From youngsters to the veterans, many individuals these days are marching towards personal loans, this idea of temporary relief is leaving their financial situation in turmoil. With time, the lenders are only multiplying the interests and after some years, the borrowers are seen under the mountains of debts.
As per the recent survey conducted by a popular organization, the total number of loans has shot up significantly. We can see tens of people standing in the queues at the pawnshops, which means that many of them will face the dire consequences if the planning is not done properly. With the advent of the Internet and the flexible credit cards, a number of youngsters are misusing the opportunities.
Many of our dear readers might opt for loans at the loanshop and for those who were scared of the consequences of bad planning, here we have enlisted five tips that will help in managing the finances.
1. Do not opt for the loans you cannot afford:
Always have a check on your financial status which includes the flow of income and the existing debts (if any). If you are planning to take a new loan to buy a fancy car, please bear this in mind- higher the debt higher the repayment terms. This often leads to lesser ready cash for your other monthly expenses.
In general, it is said that your total monthly expenses should not exceed 35% of your gross income. This fundamental formula is used to ensure that you will be able to repay the loan with ease and not create a pit-hole for your future.
2. Read everything before you sign up:
Never sign the agreement blindly. Always go through the terms now and again. If you won’t understand anything, then ask for the expert’s help. Roger that.
Remember, we are not living in a stone age. Stay aware of your rights and obligations before opting for the loan. Never hesitate to questioning any term you didn’t understand. Know that you are the customer and have the right to know every detail thoroughly from the service providers. Give up on the lender if he denies revealing any details. This research is important because, once you have signed the contract, you are legally bound by the terms and conditions stated.
Who knows what comes tomorrow, so, in order to manage debt well, do not make the common mistake that most people do when taking up a loan deal.
3. Do not borrow to pay a debt:
It is just like filling the pit just to dig another one. To manage the debts one must not stress the things further by borrowing another debt.
If you’re going to take another debt, it is pretty clear that you’re already screwed about paying the former one. Stop before you dig yourself up once again, never let another debt come in your way. Try to do overtime or borrow from your relatives with no interest rate.
You can avoid such situations by paying off the early installments in a timely manner. By doing so, you can avoid the penalties. To further deal the debt in a flexible way, you should pay off the higher amount in the beginning so that the interest rate will come down which eventually helps you when you run out of money at some time.
4. Reconstruct the repayment terms:
Avoiding phone calls of the lenders and hiding away from their car horns is the worst case scenario for both borrower and the lender. You must not let that happen at any cost. All it will do is drag you into the mud. No words can describe the embarrassment.
The best way to battle such a situation is quite simple- have a talk with the lender. This is much better than suffocating yourself under the fear of debts. Most of the time, the lenders will definitely help you by trimming the interest rate or extending the duration of payment.
5. Learn about filing Bankruptcy:
If you fought really hard, but failed to win the battle against debts, then you have to go with this option. Try to win the war using the above five points until you are sure about yourself being doomed.
You should have learned things about the consequences before even taking the loan which makes your post-debts work half-easy than they are in actual.
As now you are ready to file the ‘Bankruptcy’, you must be aware of the laws that were propagated by the Federal Trade Commission. This legal procedure allows you to reorganize the financial situation or discharge debts if you cannot pay them. There are various types of bankruptcies and you should select the one which is related to your kind.
Not just the kind lenders or the feasible services, we at loanshop.biz will assist you in every single step regarding loans. We expect you not to face the dire consequences of your loan, after all, our lenders provide customer-friendly loans and you can always have a nice talk with them, and negotiate the interest/time rates.