College or the first job usually marks the shopping around for first loans for a lot of young people. Having been strapped for cash all these years, the temptation to go big the first time around is pretty heavy.
So what should you keep in mind when you take out your first loan?
UNDERSTAND NECESSITY. Whether you go for a student loan or a personal loan, consider one very important question: How much do I NEED? Many young people are not able to delineate their needs from wants, and when taking a first loan, going big will make you lose in the long run. Even when you can sensibly foresee a strong capability for you to meet your payments, a big loan is still a big commitment.
Strapped for cash and ready for your first loan? Well make sure you know the basics!
LEARN THE BASICS. I’m not just talking about the basics of a loan. I’m talking about the basics of responsibility. Everyone knows a loan is simply paying back the capital sum with interest, but if you don’t have the fundamental basics of responsibility, such as paying on time, managing your money, and saying no to that third new bag of the month– you basically know nothing. Another thing is that loan officers will inquire about your spending habits, do not lie or beat around the bush. Instead, breathe and answer confidently. This is usually a good sign, as this means that they are assessing which loan bracket you fall under.
SMOKE AND MIRRORS. Don’t get caught in high loan offers. ALWAYS check and understand the repayment plan. How high is the interest? What are the terms of repayments? Keep in mind that the higher the interest, the longer you will most likely take to complete your payments, and if you don’t meet the terms you will be charged more. Don’t get caught in a vicious cycle. Also, do your research before you signing off with a loan facility. Sometimes great deals are hiding bad records. If you find a loan provider you can trust, it will also be easier to communicate with them for any challenges you might encounter.
IT’S NOT A PHASE. IT’S A LIFESTYLE. Paying off loans responsibly should not be just a phase in your life. Like it goes with fitness – don’t just go for quick diets, go for a lifestyle shift. If you’re off to a good start with your credit score, keep it up, lady! If you already have bad credit score, do not panic. There are many way to improve your credit score and the time is now. Gradually rise out of bad habits and see your chances for better loans increase. It may not be the only consideration for loan grants, but it is a big part of it. Decide to make a change in the way you manage your finances now. Keep up with your payments, and settle other debts and outstanding bills slowly but surely. Work hard and set a goal for yourself to make sure that you are on a career track that will late guarantee a growth on investments and assets.
You don’t need to be a genius to get money smarts.
So there, ladies. These are pretty basic but a reminder never hurts. Most of us do forget the basics because we are blinded by the big possibilities. If not approached with caution your first loan can also turn into a life sentence. Be smart. There is no easy and quick way to get around it. Being responsible and making an informed decision is your best bet to accomplishing big things today and in the future!
Stay sharp, girls. If you have any questions or ideas, comment below or tweet us at @mscareergirl now!