Errors in borrowing – 7 sins of the borrower | Choosing a loan

Ill-considered actions

When deciding on an online loan, first of all we should think about whether we would really need it. We borrow mainly in urgent cases, and therefore – we are often guided by emotions.
The basic mistakes we make also result from a lack of knowledge about the financial industry. We are looking for a loan ideal for us, but we understand every second word from the offers. In such situations, it is good to learn the basic concepts of the economic world. For this purpose, we can reach for a loan glossary that will allow us to better navigate the industry.

Lender verification

Lender verification

Choosing a loan company is extremely important. If we want to enter into a fair contract, we need to find a reliable lender. The first step should be to check the lender in the National Court Register, i.e. the National Court Register. It is equally important to make sure that the company is listed in the business register and has a NIP and REGON number. More insightful customers can find out where the company is based. If we want to take out a loan in a company that has already been checked by people from our environment or has been operating on the financial market for many years, we should remember, however, that caution is never too much and that trust is one thing and control is another.

Let’s read the contracts carefully

Let

Inaccurate reading of contracts is another common mistake. Contrary to the principles of responsible lending, such contracts are usually briefly reviewed by us and then signed. When deciding on a loan, we are very optimistic and believe that we will definitely cope with its timely repayment. However, if the settlement of the obligation comes to us with great difficulty and arrears begin to accumulate, then the effects of our laid-back approach can be serious.

Personal data protection

Personal data protection

Watch out for personal data theft! People who are just starting to use online loans are often not very cautious. There is no shortage of people in the virtual world who are just waiting to take advantage of our recklessness. The financial market is currently targeted by scammers and we must retain great responsibility when concluding internet contracts. First of all, we should ensure secure access to a computer and the Internet. It is unacceptable to complete loan forms in cafes or when connecting to a foreign WiFi network. We should remember that there should be no third parties in the transaction between us and the creditor. This means that public transport or a shopping center is not the best place to use our personal data. The contract should be signed at home.

More is not always better

More is not always better

A serious mistake is still not matching the loan amount correctly. Unfortunately, it is often too large and as a result brings us more losses than benefits. How not to overdo the loan amount? It is not as difficult as it may seem. At the beginning we need to assess our needs and think about how much money we are able to organize ourselves and how much we will be forced to borrow. It is good to analyze our home budget to make sure that the loan will not be too much of a burden for it.

If we are unable to determine our credit standing, we can ask for help from a financial advisor, but please note that this involves additional costs. We must bear in mind that if we borrow a lot, we will also have to pay back more – it is closely related to the interest that the lender will charge. So if we hesitate between two sums, it will definitely be better if we choose the lower one. The ability to borrow as much as we need is used by a few, but we can all learn it.

Late delivery as a first step to financial problems

Late delivery as a first step to financial problems

Choosing the installment loan repayment period is as troublesome as choosing the right amount for our financial needs. When signing the contract, we should seriously consider how to repay the borrowed sum, so that we can be sure that we can afford it.

Timely repayment is also very important in the process of building our credit history. It is worth taking care of it – otherwise in the future we may have problems with obtaining further obligations.

Loan for a loan

Loan for a loan

Next loan to pay back the previous one? A vicious circle from which it is difficult to break free. What to do if we are unable to pay back borrowed money on time? Lenders give us the option to extend the repayment period, which means that our installments will be lower. Therefore, restructuring the liability seems to be a good way out of the situation if we know that our problems with delays are not temporary and that we will not be able to maintain the previously agreed installments. If we want to facilitate repayment, it is also worth considering loan consolidation, which can also save us from falling into a spiral of debt.

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