5 Tips for Responsible Borrowing
In the journey of life, there are several occasions when you will be required to borrow money from banks. It may be for purchasing a home, car, or getting a Loan Against Property to fund your big-ticket financial needs. Either way, when you borrow it is imperative that you exhibit the traits of a responsible borrower. This will not only help you build and maintain a healthy relationship with your lender, but will also ensure that the next time you need to take credit, it will be easily available.
In a bid to help you in this endeavour, we have collated a list of 5 tips that will help you inculcate the habits for mature borrowing!
1. Know Yourself
Self-awareness needs to be your go-to means when it comes being a good borrower. Before you opt for Taking a Loan Against Property, Personal Loan or any other form of credit you should carefully analyse your financial standing and weigh the money you already have against the money that you require.
See, if you truly need additional funds, or if you can manage the expenses with the help of your current savings. If you need to take a loan, make sure you only apply for the amount that you need and nothing more than that! Remember, a loan accrues interest, and if you already have the resources, taking a credit may unnecessarily increase your financial burden.
2. Be Accountable
Regardless of the amount of money you have borrowed as a loan, make sure you take full responsibility for your obligations. Wondering how to do that? Well, you can start by ensuring that you pay your equated monthly instalment (EMIs) on time. Then again, as far as possible, don’t use any excuses to delay or default your payments. The more compliant you are towards the repayment of your loan, the easier it will be to become worthy of the trust of the lenders, thus helping you nurture a strong relationship with them.
As a matter of fact, to be a responsible borrower, it is suggested that you have at least 6 months’ worth of your business and living expenses as your savings. Having this cushion not only helps you put a strong front for lenders, but also helps you pay your EMIs in times of distress.
3. Look for Other Sources of Revenues
Loans are great when you need financial assistance, but so are other means of revenues such as a part-time job, some simple ways that can help you cut costs in your business, or a consistent habit of saving money for the rainy days. These sources can conveniently help you in meeting short-term expenses, which require a competitively small amount of money! By taking care of such expenses on your own, you can ensure that you do not have too many loans under your name, thus assuring lenders of your financial discipline, when you apply for a loan of more significant nature!
4. Pay on Time
We cannot stress this enough! Once you take a loan, it is your onus to pay your EMIs on time. Just in case, you’re unable to make a payment on time contact your lender, and convey the same. More often than not, the lender will make the requisite adjustments so that your credit rating doesn’t get hurt in the process. Besides, this simple act will help your lender see you as a dependable borrower.
However, make sure you don’t delay your payments too often. Since you already know about your obligations towards the lender, cut down on other expenses to make way for EMIs. For your credit history to be ideal, it is best that you don’t skip or delay even a single payment. And with some efforts, you can surely take care of the same.
5. Be Trustworthy
It is evident that any lender would only want to give a loan to someone who they can place their trust in. Hence, it is strongly recommended that you prove yourself as trustworthy over time. If you take a loan for the first time and repay it sincerely, the lender will be more than happy to assist you, the next time you are on the lookout for some credit.
We hope that you are now aware of some easily comprehensible tips that can help you become a responsible borrower. And now that you know the importance of repaying your loan as stipulated in your loan agreement, wait no more before you start your hunt for the best Loan Against Property offers or other credit to fund your financial needs.
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