3 Important Questions To Consider Before Borrowing Money

Even if you have a genuine need to borrow, do so with care.

Borrowing money from a lending or financing company carries with it certain rights and responsibilities. What are the things to remember before taking out a loan? Consider some of these questions and reminders.​

Is it a need or want?

Am I borrowing to pay for something I need, or can I delay buying it later?

Is the company legitimate?

AM I engaging with a lending or financing company that is registered, licensed, and listed?

Do I have enough to pay for my debt?

Will I be able to pay for the loan on the date agreed upon, with the corresponding interest rate and other charges?

​​Here are some checklists before taking out a loan:
​

• Only borrow what you actually need and what you can afford to repay.
• Check the interest rate, fees and terms.
• Compare loans with different lending or financial companies.
• Borrow from banks or credible financial companies, and beware of borrowing scams.
• Loans that do not require proof of income or credit check usually come with a higher interest rate and the loan amount is smaller.
• Do not apply for multiple loans within a short period of time.
• Do not sign the loan agreement unless you understand all the terms.

Remember, when you borrow money, you agree on a date by which you have to pay the money back. For more information, you can read my separate blog post: Important Financial Terms To Remember When Applying For A Loan