The easy part of getting a personal loan is it will help you pay your outstanding bills before their due date. Paying your loan later on is already a different story — especially when you realized later that you won’t be able to pay it right away.
This month’s paycheck almost made your heart sink into the abyss, especially that there are several bills on your list that will be near their due date — and you have to pay for them to avoid penalties. Or you’ve been targeting that dream home or wanting to start a business and you’re short on funds. So you thought of a rather extreme solution for them to pass — and that is to apply for a personal loan.
Nowadays, people who where rather short on cash or just wanted to get their dream home, car or business would apply for a loan. Getting an approval and signing the contract is the easy part, just sign and you’ll get the loan you’ve prayed for. But paying for it later is already a different story.
By applying for a loan, one knows the responsibility that comes with it, which is paying for it, of course, either in full or in installments. If one is unable to pay for it by however means, lenders would either be kind enough to assist the borrower through financial assistance or extending the deadline on certain conditions or be quite demanding to the borrower to pay them on time or penalties will follow after. This is why lenders are taking the financial background of each applicant into consideration before either offering them a reasonable amount that they can pay or reject them fully — their current job, monthly and yearly income, and credit standing. It’s one way to ‘help’ them not to be burdened by additional bills in the future.
Sadly, as taking a loan is considered a helpful option to help the person meet their dues, it is also prone to abuse. Some financial institutions would not delve into your outstanding loans as long as you have a regular job and your monthly income meet their requirements, or after paying what you owe, you’ll end up borrowing again. Or even trying to apply for a loan even though you don’t need it — then you’ll realize in the end that you’re working and earning for the sake of paying all your debts instead of saving for yourself and for your family.
This post doesn’t mean to demonize loaning by any means, but only to make people realize the responsibility they will have to take after they got their loan approved regardless of how much it is or what they loaned for. The responsibility of paying for it afterwards is the first thing one should consider; if they will be able to pay it on time every month or in one go once they knew they are good. Next to responsibility is the necessity and purpose. Do you really need to get a loan? Do you think you’re currently short on money prior to considering getting a loan? Do you really need a car or a house right now while you’re still stable and can still save for things you’re investing on?
So there are two questions you should keep on asking yourself before signing up for a loan: Do you really need to get a loan? If so, can you pay it on time?
I thought of writing this to lecture myself of what I did after I got laid off from my part-time gig. The big lesson for me is not to rely on your side gigs as they are just temporary, whether you’re getting paid higher than your current salary or just enough to help you make ends meet. If you’re someone who relies on both regular and part-time jobs, better for you to have a backup plan in case you lose one of them — or, worse case scenario, both of them. Once you borrowed something, you have to return it in full, whether with added interest or none, and on time if possible. Trust me, you’ll never like to live every second thinking of only how you will pay your debt to the point that you’ll regret borrowing later.