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Why You Might Want To Think Twice Before Borrowing

August 4th, 2011

There are times when we’re faced with a situation where we desperately need money, but realize that the guy lending the money is aware of this. Desperate times don’t always call for desperate measures. Before you sign away your future to debt, consider some key factors that might change your mind:

Credit Score
Before you try and apply for any loan, you should look at your credit score first. This figure is going to determine what kind of rates you’ll receive. If you have a bad rating, you’re going to get some pretty stiff rates. Sometimes they can be double what someone with a good rating is paying. If you have a low rating, you should think twice before borrowing.

Co-Signer
It your credit rating is so bad that you’ll need a co-signer, this is a big warning sign. If any situation crops up where you miss a payment, then the lender is going right after the person that co-signed on your loan. This is usually a parent or a close friend, and you might wind up losing a relationship while maintaining debt at the same time.

Need Versus Want
What are you using the money for? That’s what you need to ask yourself. If you’re taking out a loan so you can buy a TV or a car that you don’t need, then you need to rethink your approach. Taking out loans isn’t something that should be approached lightly and we can lose sight of what’s important and the need versus the want can sometimes look similar.

Stability
The last thing you need to contemplate is exactly how stable are you, financially speaking. Do you have a good job that you feel secure in? How much disposable income do you have at the end of each month? If you don’t feel secure in your job, then you could find yourself in bankruptcy court or foreclosing on your home. These are things that will follow you for years, and nobody wants that.

So, before you sign, consider the options. If you need money, think about some of the ways that you can take a second job before you take on the debt. It doesn’t even have to be a real-world job. There are tons of ways to make money online by doing simple things like reviewing products for marketers or taking surveys with Survey Head. If you need money, think of the ways you can earn it rather than borrowing, and you’ll thank yourself in the end.

Jason Guest Post

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