On Being a Responsible Borrower
On Being a Responsible Borrower
Thinking of borrowing money and taking out a loan in Singapore? Before doing so, ask yourself these 5 simple questions:
“Do I really need to borrow?”
“How much can I afford?”
“When and how much should I borrow?”
“What kind of lender is right for me?”
“Which loan is best for my needs?”
A loan can fund and safeguard your business and other needs but one must always remember that borrowing money is also an obligation that could impact your business positively or negatively. It can either grow your business or weigh you down. There’s only one way to make the most out of your loan – be a responsible borrower.
Ways to Become a Responsible Borrower
After you justify your need to borrow, here are the next steps to become a responsible borrower.
1. Think again.
Remember, if you don’t need it, forget about it. Your need should justify the means. You don’t want to drown in debt if it’s just for some impulse that you felt when you woke up this morning. If after reading this, you still believe that taking out a loan is still the best possible way there is, you can proceed to tip #2. Otherwise, consider other options.
2. Borrow an amount not more than what you can afford to pay back.
Being a responsible borrower starts with figuring out the right loan amount and your ability to pay. Being eligible to borrow doesn’t mean that you can max out the amount the lender will allow. Borrow only what you need and make sure that you have enough profit to pay for it. It is best to have a forecast on your financial capacity even in a worst-case scenario.
3. Know your financial priorities.
Before making any other big financial decisions, always keep in mind that you are in debt and you can’t afford to miss a payment due. Always ask yourself if you can still bear the expense of other financial obligations. If the answer is yes, then proper budget allocation would be the next best thing to do.
4. Always have a backup plan.
Ever heard of the saying: “if you don’t have a Plan B, you don’t have a plan”? Even the best-laid plans go awry. It’s not about doubting your judgment or problem-solving skills, it’s about gearing up for reality. Always think of other ways where you can still achieve your goals even if you can no longer follow your original plan.
5. Finally, be an informed borrower.
Carefully study all the terms and conditions in any contract. Make sure you understand all the provisions in it. Don’t be afraid to ask and seek help when you’re not sure or when you don’t understand something. This will also equip you with what to do in case unexpected problems occur. It is imperative that all borrowers understand and comply with the agreed contract.
Deciding on whether to borrow money or not should not be done overnight. It takes time and proper assessment. It’s easy to get excited when you qualify for a loan but this excitement can easily turn into burden even at the first quarter of your payment term.
Save yourself from all the potential stress that may come with your loan, make sure that you follow all these steps to become a responsible borrower. Get more informed when you seek the assistance of a loan consultant from Suite Capital.
Blog at Suite Capital
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