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Questions to ask yourself before getting a loan

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Ask your self whether you can afford it, this is even before you think of requesting for a loan,and since your bank statements are clear record of your financial income and record all your expenses.

Your starting point should be your income after your employer has substracted taxes and other expenses such as UIF.

Take into account all current expenses-from rent,petrol and grocery money to helping family members with school fees etc etc.

The sum is your monthly income minus your monthly expenses=how much you will be able to pay off monthly.

Some people believe that its more affordable to buy something on credit because the monthly repayments look like smaller amounts compared to paying large,once off amount.When this is untrue its always cheaper to buy cash because you wont be paying interest.

Not all debts are bad debt.Good debt is the one which will add value to your life overtime such as student loan or when you buy property that appreciates in value-provided you can afford a bond.

Bad debt is anything you cant afford and that does not appreciate in value over time such as car loan.Good debt is only positive if you can be able to pay it off consistently.If you fall behind on payments or you take out student loan and end up partying your time away and failing every subject, it certainly wont be of any advantage.

Don’t take loans for you family member or a friend just because they want to use that money for something, if they fail to pay and you fall behind on payments, you will be the one who will be branded a bad debtor, not them.

Set and stick to clear boundaries as to what they can expect from you so that you can prevent false expectations and negative attitude.You can even suggest to them to see a financial advisor who can help them draw up their own financial plan.