Do we really need the money we borrow from the bank? In the following rows, I will explain the thinking we must have when we think of a bank loan, because either we want or we do not want a bank loan is not a game. Regardless of what the bank promises, we must have in view many aspects.
Bank loans are those loans in money having as a lender the on / banking institutions offered to individuals, legal entities and PFAs through a contract established with certain contractual clauses respected by both parties.
Do we really need the money we borrow from the bank?
The following lines will explain the thinking we have to have when we think about a bank loan, because either we want or we don’t want a bank loan is not a play. No matter what the bank promises, we have to consider many aspects.
Keep in mind that for any type of financing over time, even if it is a guaranteed or unsecured loan (these have a value greater than the amount of + 15,000 dollars) and in 1, 5, 10, 30 years you will pay in plus at least 25% (and this in the good cases that have disappeared), but you will usually have to double back for the simple reason that the institution that offered you this loan must somehow make a profit from this business.
As a general idea, what we need to know about loans is that they are loans offered by certain institutions, and no matter how small the loan, we pay much more back. And of course, to mention that any loan we make, we do not make a profit, only the bank!
What is the reason why I want this credit?
Whether we need new furniture or want to buy a house/car we need to think about this very well. The most general and good question is the following:
Do I really want a bank loan? Maybe yes maybe no.
Below I will offer you the questions you need to ask yourself, personally before taking this step:
1. What will I do with the loan money?
Whether you want to change your car, your house or renovate your home, it doesn’t matter in the end. The house you want to move to is almost crumbling to you? The car you own has no chance of ever starting again? Do you just want to have a car?
Think well, don’t let anyone influence you, only you can decide and you can choose the best answer for you.
Do I really need that item/thing that I will buy from the borrowed money?
Can’t you stand still like that? Of course not, it depends only on you and your desire. Do you need the money for the good of your family? To have an easier life? That’s what you decide!
If in 10 years I will lose my current job and I will have a much lower income (or even none), how will I pay the monthly rates? Who will help me get my money back? If the forced execution is reached, what will happen? (for a big mortgage the mortgage will be your home) How will I handle it?
How will my life be without the thing/object I could buy from the borrowed money?
And again: Do I really need this money from the bank?
Repeat these questions daily, until you are sure and you will say: Yes, I am firmly convinced that I want this money and yes, I will deal with the rates in the next few years, regardless of what will or will not happen. I really want this money.
ATTENTION to the contract you sign!
I am sure from my own experience that at least 1/1000 people do not exaggerate at all, I do not read even 15% of the contract when signing it.
Why? Unconsciousness, carelessness (when they think how much money they will receive in the next few minutes that matter those signed papers ?!), hurry and of course the bank does not want this. The more informed you are, the stronger you are against them.
I personally know people whom the bank has gone crazy over the phone with over the phone for a loan but not to pay, but to make a request to get the credit, and again I am not kidding or exaggerating.
In the contract are some chapters that we should not neglect even more precisely:
1. INTEREST AND COMMISSION
Pay close attention to this chapter, read it carefully not only to be read, you need to understand everything that is written there, also the interest can be fixed or variable.
If you have any doubts, however small, you ask, it is your right, the lender has the obligation to explain everything to be able to correctly evaluate the credit and what it represents. I will soon write an article about a loan contract and all that it entails.
2. CONTRACTUAL CLAUSES
Everything about contractual clauses must be read and understood. You need to know what will happen if you do not pay the installments on time, what are the consequences when you will get from the friendly to the legal way, it is your right to make certain appeals in case of breach of the contract by the bank and which is the right of the bank legally by which it can act in the court the recovery of the credit.
The risks we face in not paying the rates on time?
Of course, there are certain risks, and these must be very well known by the people who owe the banks and the people who want a loan in the near or distant future:
a) Increase of penalties – these penalties are set by the bank according to the contract you signed.
b) Reporting to the credit bureau
c) Ownership on the salary account – practically the bank has the legal possibility to block the client’s account in order to recover the necessary amounts of money and more precisely the bank can block ½ of the bank account amount. The customer can no longer withdraw the money or manage it.
d) Forced execution
As a general conclusion, we must understand that we must think extremely well when we want a loan.
Even if the bank stresses you out and drives you crazy over the phone over the phone, because of your loyalty you now have a credit.
Think about it very well when you take this step, weigh the cause for which you want a credit, and choose with your mind not your soul. Don’t be influenced by anyone.