3 questions to ask yourself before you apply for a loan

Wait!!!

Before you apply for that loan, hear us out

To reduce the myths surrounding loans, we’d first have to break the stereotypes around them.

For your sake and ours as well, you should never have to apply for a loan “unsure” or “undecided.”

And that’s why we’ve listed out 3 important questions you should ask yourself before taking that loan:

Do you need a loan?

This is a highly underrated but important question to ask yourself before applying for a loan. Are you actually in need of it or are you craving credit alert?

We know that the joy that comes with receiving a credit alert is incomparable and very tempting but, we urge you to take another look at your finances and be 100% sure you want to take out a loan. Are you ready to pay back with the added interest? Are you ready to face the scrutiny? Are you ready to lose something you own or face court charges in a case where you default on loan repayment?

If taking out a loan does not benefit or aid you extensively in the long run then there is no need for you to take out one.

How urgently do you need the loan?

Another thing you should consider before applying for a loan is the “urgency of the situation.” The type of emergency you’re facing also determines if you truly need the loan at that moment. Some emergencies need a more immediate reaction than others, for instance, if you had to choose between taking out a loan for a health emergency and a car emergency, you’d obviously pick the health emergency (your health is more important than a broken bonnet).

You’d need to take out an immediate loan to solve a health emergency but a car emergency can be postponed to another time (while you make do with other alternatives). The urgency of a situation can also be a deciding factor your lender may use.

How do you intend on paying back?

Okay, so you’ve answered the questions above and it’s looking a lot like you need to take out that loan. There’s just one more thing to consider — How are you going to pay back the loan? Do you have a stable source of income that will help you compensate for the loan while maintaining an acceptable living standard? Or are you just trying to press your luck and hope for the best?

When you decide to take out a loan you have to cover all ground and that also includes how you’re going to repay your lender without ending up living below standards. The idea that loans are destructive and cripple one’s finances is totally wrong! It’s bad financial choices that cripple one’s finances. With the right financial plans, a loan can very well be a boost to your overall standard of living.

Once you’ve worked out how you’re going to repay your loan then there should be nothing holding you back.