Choose A Loan Carefully

Choose A Loan Carefully

Choose a​ Loan Carefully
If you​ are thinking of​ taking up one of​ the​ many offers that you​ see on​ the​ television or​ in​ the​ daily newspapers .​
Offering to​ give you​ a​ personal loan that will consolidate your debt into one manageable monthly payment,​ then before you​ take them up on​ their offer,​ sit down and think it​ through .​
This is​ because they are not as​ super and as​ painless as​ they would like you​ to​ believe.
Most of​ us when it​ comes to​ special deals will have a​ natural thought process of​ saying that there must be a​ catch .​
Though with the​ consolidation loans,​ many seem to​ have a​ blind spot and only look at​ the​ loan amount column and the​ monthly payment column.
This is​ the​ trick that the​ loan companies only want us to​ see,​ as​ by putting it​ in​ as​ straight forward as​ this means that we only look at​ the​ payments,​ to​ decide that we can afford to​ pay this amount back .​
Due to​ it​ being less than what we are paying in​ total,​ to​ our individual debts .​
By paying back the​ consolidation loan,​ we will look upon it​ as​ paying back the​ monthly repayments easier .​
Though what we fail to​ see past is​ the​ other trick that the​ loan company will install,​ in​ the​ look of​ the​ loan and that is​ the​ timescale in​ which you​ have to​ pay the​ loan back .​
By putting the​ payments against the​ amount of​ months that you​ have to​ pay the​ loan,​ many will feel that the​ term of​ the​ loan is​ not too bad .​
But the​ simple fact of​ the​ matter is​ that if​ you​ are paying the​ loan for 60 months,​ therefore simple arithmetic of​ 60 payments.
What you​ really must do is​ put it​ into years and your whole thinking will change and you​ may ask yourself,​ Do I​ really want to​ still have this debt 5 years down the​ line?
If the​ answer is​ still yes then maybe you​ should look at​ what this consolidation loan is​ going to​ cost you​ over the​ term of​ repayments and maybe your answer may not be so stead fast.
The interest rate on​ most of​ these loans is​ variable so can change from one year to​ the​ next .​
Ok they may go down but more than likely they will rise,​ so if​ you​ do go for a​ consolidation loan make sure that the​ interest rate,​ is​ lower than that of​ your current debts .​
With another must do is​ make sure that you​ work out if​ you​ could pay off your existing debts in​ under the​ period in​ which you​ are taking the​ loan out for,​ then do so .​
If you​ cant then the​ idea of​ having all of​ your other debts cleared in​ one fell swoop,​ is​ appealing,​ but comes with a​ word of​ warning .​
DO NOT in​ any circumstances use the​ credit cards or​ store cards that you​ have cleared,​ as​ this will only mean that you​ will build up more debt,​ sinking you​ further into a​ financial swamp that you​ may find you​ cant get out of​ this time.

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