Borrowing wisely

Credit and loan are banking services without which the economy would be inconceivable, however difficult it is to imagine now, in the wake of the anti-bank sentiment of recent years.

At the same time, the 2008 economic crisis has shown that credit can carry great risks, especially if we do not foresee the risks we will take. However, credit is not a bad thing at all if we follow the following rules.

Once we have decided that we want to borrow

Once we have decided that we want to borrow

The first thing we need to do is consider the amount of income that will be lost from the family cash due to the repayment. It is a good decision to take out a loan if it does not jeopardize your family cashier during the chosen repayment period, that is, the less the monthly installment.

And just as important is what we borrow. It is worth borrowing for a home purchase (this can be called good credit), but for a brand new sports car it may not be worth borrowing 10-20 million (also bad credit).

It is healthy to have up to one third of your monthly income (including any other credit), but better still only 20 percent, so that you will be able to pay your installments in the event of an unexpected expense or loss of income.

Legislation has changed a lot in recent years


Making current loans much safer and more predictable than they were before the crisis. Despite this, it is still almost impossible to find the best designs without professional help. This is because we have to compare the offers of at least 20 banks, and there are so many types of loans with dozens of discounts and combinations that if you go into your own bank or look at only 3 banks, it may not be easy for us we have chosen the most favorable and safest construction.

Therefore, it’s a good idea to use a credit calculator and stay informed for weeks before deciding. It is often said that in life, marriage, home buying and borrowing are the three choices (perhaps even the fourth car purchase) that affect our lives for years, and if we make the wrong choice, it will cost millions.

We generally do not like to deal with finance


Although it would be good if at the basic level we would make a conscious decision or at least ask experts (and not salespeople who have been hitting an agent for a few months) who do this. The worst thing we can do is start borrowing without asking anybody, without being thoroughly informed, and without talking to knowledgeable people.

When we buy an apartment, we usually look at it several times before we put down a deposit, we bring with us competent people from the insulation to check the house’s legal issues and talk to the common representative, and optimally we have gone to at least 20 apartments in person.

Even if we buy a used car, we usually take it to our mechanic, check it out several times, go for a test drive, and even get official data from the central database – and, of course, the Internet or 200 cars and homes before we leave home.