5 things to do before you start getting into debt, prepare first. Apply for a personal loan

5 things to do before you start getting into debt, prepare first. Apply for a personal loan

 1. Look at the need to incur debt – apply for a personal loan.

Everyone should have a clear reason for incurring debt. Do not let go according to your emotions or according to your own needs. By first considering whether the debt that is about to be incurred is How much is it necessary for life? Are the items to be bought a necessity or just a necessity and are priced too high to afford and cause difficulties for yourself after purchase?

If you incur debt, you should only incur good debts, such as debts incurred in generating income, which can generate benefits in the future. Debt for long-term stability Debt for the necessity of living or debt for business operations that can expand the business and make a profit.

The debt that should be avoided or should be minimized is the debt for excessive consumption because it is mainly focused on convenience. Because in addition to not generating income, it will not help create wealth in the future.

2. Choose the type of loan that suits your needs. When applying for a personal loan

There are various types of loans, such as housing loans, car loans, personal loans, business loans, etc. Therefore, you must plan carefully first what you will do with the loan. This is because each type of loan has differences in terms of loan limits, interest rates, interest calculation methods, installment payment periods, as well as collateral for debt repayment.

3. Compare loan conditions and interest rates.

In addition to choosing the type of loan to meet the needs. When applying for a personal loan, you must understand the terms and conditions carefully because each financial institution has a loan service with different loan conditions, interest rates, and credit limits.

To compare the data of each financial institution before deciding to apply for a loan, it is recommended to compare information such as the reference interest rate by calculating how long the installment period is. Total interest rate payable The interest calculation method includes considering various expenses charged by financial institutions, such as loan application fees, early redemption fees, asset appraisal fees, stamp duty, etc.

4. Assess debt repayment potential and liquidity in spending.

Before incurring debt, you should assess your financial position and readiness to pay off your debts. What are the current expenses and how much debt must be paid each month? To calculate whether if there is an increase in debt, it will affect daily spending.

For example, if you have a monthly income of 50,000 baht, you should have an installment amount of not more than 22,500 baht (50,000 x 45%) because if you have an excessive monthly debt payment burden, there may be a chance of default. In addition, in real life, there are always unexpected expenses that occur. As a result, they may have to borrow money to become liquidity and have the opportunity to get stuck in a cycle of debt.

5. Assess earning capacity and income security.

You must be sure that if you incur debt, you will be able to pay the debt in installments until the due date because it is important to pay the debt on time. If the payment is not made on time or is several days overdue, the interest will be incurred immediately.

Usually, if the payment is not made on time or defaults, interest will be charged. Fines for late payment, as well as fees for debt collection. Subsequent problems in addition to interest burden and financial burden Financial credit is also important because if there is a history of arrears, not paying on time or not paying in full, it will affect the consideration of future loan applications or may escalate to the point of lawsuits.

In conclusion

Being in debt is not a bad thing. Just know how to get into debt properly. “Debt” will be one of the tools that can help build wealth.