A lesson to learn from my loan mistake

A lesson to learn from my loan mistake

Whether you are a professional who works a 9 to 5 job or a business owner, there may come a time where you don’t have sufficient funds to do the needful. During such hard times, you may consider getting personal loan to fulfill the requirement.

Never borrow more than you need!

One of the biggest mistakes that most borrowers make is borrowing more than what is needed. If you are a cautious person you may argue saying its better to have more than to have less. Which is very true. However, borrowing more than you need will result in your cost of borrowing being higher than what it could be.

As a result, you may be unable to pay back your loan on time, and this could result in the lender adding fines/penalties to the amount you are supposed to pay back; thereby increasing your cost of borrowing even more.

Another common mistake made by borrowers is that they choose a lender without doing much research about the lender, and the interest and other charges that must be paid when paying back the loan. Most institutional lenders have hidden charges that borrowers may not be aware of. If you are unfortunate to borrow from such a lender, your cost of borrowing will be higher than what you expect it to be.

What should you do?

When in need for a loan, borrowers should consider whether he/she should ask for a loan from a family member or a friend, or whether he/she should apply for a loan from a registered lender.

Cost of borrowing from family or friends will be much lower compared to borrowing from an institutional lender. Therefore, it is always a good idea to exhaust all personal options available before going to a bank or a loan provider.

In situations where borrowing from a family member or a friend is not an option, reaching out to a service such as Cashwagon could be the best next alternative as its quick, hassle-free, no hidden charges, and the cost of borrowing is presented before an individual obtains the loan.

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