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Reasons to take out a loan

Reasons to take out a loan

There are times in life when we have to deal with expenses, but do not immediately have the money to do so. To buy a house, build or renovate it, for example. But also to buy a car or replace a faulty boiler. In this case, you can apply for a loan to banks and 3rd party intermediaries. Lenders can possibly advance you the money you are missing. That money, you pay it back in installments. In exchange for this loan, you must pay interest and fees.

There are different types of loans. If you are an individual, you will be offered a mortgage or consumer credit:

  • A Mortgage loan is an amount that you borrow to buy a home, land, or to finance work at your home. Mortgage usually involves a larger amount with a longer repayment period
  • You plan to buy a car or a new television, you have to organize a wedding, you have to finance private needs? In this case, you can Apply for a Personal loan with low Interest rates. Unlike mortgage , the amount borrowed is often smaller and the repayment period is shorter.

But do you really need a loan?

If you think you need a loan, you must first ask yourself a first question: Do I really need that ?  What are the possible alternatives ?

If you dream of owning your own home, it is likely that you will have to take a loan over 20 or 30 years for a big part of the price. This is the case for most new owners. Above all, it’s important that you know where you are going in advance: assess how you and your family will manage the monthly repayment of this loan, as this repayment can be a very important item in your monthly budget.

Try to save a maximum in advance. Because the more money you have put aside to invest in your home, the better the terms you will receive from the lender. The monthly repayment will be less important and you will save interest!

For more information on mortgage loans or Home loans, we recommend you to consult the section Bookmypersonalloan-Home loans about this.

You may also be faced with other expenses for which you do not have money immediately available, such as a new car or the wedding of one of your children. Here too, you can apply for a loan from a lender. But the consumer credit is usually not free: you have to pay back the amount borrowed, but also interest and fees. Think carefully before taking a loan for such expenses. If you know for example that you will have to replace your car in three years, you have two options:

  • In three years, you will take an expensive loan and will have to repay a large sum every month;
    or
  • You are starting now to put a small amount aside each month. After three years, the money saved will be a great help in the purchase of your new car.

Bookmypersonalloan Tips :

  • Before taking a loan, ask yourself the question: can I repay this loan? If you have doubts, do not take this loan or borrow a smaller amount.
  • Consider postponing your purchase somewhat. You can save the necessary amount instead of immediately making the purchase and be forced to borrow. Borrowing costs money and saving money!
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