Friends, I believe that in our fast-paced technological age, every individual has enough money to achieve his financial goals and ambitions.
All of your financial needs can be addressed if you don’t use money wisely. You simply need to be more selective in the assistance you provide to others.
That is, you will not have a financial problem if you understand how and where to spend the money you have and how and where to invest the leftover money for a better future.
Some people have enormous dreams, just like they have big financial goals. They have the bravery and determination to accomplish great things, and their willpower is unstoppable.
Then you’ll need extra money to realise your huge ambition or attain your large aims. Right today, we have a variety of choices for meeting such large demands.
All of the banks are willing to assist you. Numerous financial institutions are developing a variety of new possibilities for you.
Obtaining a loan used to be a difficult task. However, all banks and financial businesses are now willing to lend to you.
If you are not ready, all you have to do is send an email, and the bank will call you right away, ready to approve your loan in a matter of minutes.
After taking out a loan, you must adhere to a set of guidelines; if you follow these guidelines to the letter, you will never have financial difficulties in your life.
You can also easily realise your great ambition. As a result, today’s post will be particularly beneficial to you. Let’s have a look at those ten rules now.
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1: The first and most crucial guideline is that you should only take out a loan if you can comfortably repay it.
Banks and credit companies are eager to lend you money. They have the ability to provide any number of loans. Invest in a good capo if you don’t want to be frustrated if you can’t get the right pitch.
Because we want to repay it as well. So, what should the loan amount be? In order for you to be able to quickly return it.
You intend to repay the loan by subtracting all of your expenses from your total earnings.
Calculate the amount you’ll need and decide how much you’ll need to borrow. You won’t have any issues as a result of this.
If you wish to take out a personal loan, the monthly payment should be no more than 10% of your net income.
As a result, you can keep your money safe. If you’re going to buy a car, the EMI should account for up to 15% of your gross income.
If you have a variety of loans, the total instalment for all of them should not exceed 50% of your net income. That means you won’t have any money difficulties. This is the opinion of finance professionals with years of experience.
2: Taking out a short-term loan is a good idea.
Assume you’re looking for a home loan, and banks are lining up to help you. The mortgage on the house is quite large. Banks quickly grant you a loan for a period of 25/30 years.
However, repaying this loan is quite pricey. Because banks charge compound interest on their loans. We can avoid this loss if we repay the interest within a short period of time.
If you understand compound interest, you’ll be able to see the benefits and drawbacks of this long-term loan.
If you obtain a loan for a house of Rs 50 lakh from a bank and decide to return it in 10 years, you will have to pay a total interest of 57 percent at a rate of 9.75 percent on the loan amount of Rs 50 lakh.
3: Ensure that the monthly instalments are paid on time when repaying the loan.
After taking out a loan, everyone should make sure that they pay it back on schedule.
This is a set of rules to follow. Make arrangements for the payment to be paid on time, even if it is underpaid. It is critical to ensure that no payments are missed or delayed in the future.
Even if one of you skips an instalment, pays late, or misses a payment, it has an impact on your credit record. Your given name is offensive.
Your credit score plummets. If you need a loan again in the future, it will be more difficult for you to receive one.
4: – Never take out a loan to invest in something like a show of riches or the stock market.
Some people are prone to flaunting their money. Some people enjoy bragging about their new possessions.
Then, in order to fulfil that urge, some people purchase loans and display them to others. However, doing so can be risky.
Debt grows faster than income, resulting in fewer surprises and more expenses. When it comes to paying the loan payments, the cable flies. Then the instalments go wrong, and the company’s reputation suffers.
Never invest by taking out a loan, especially if it is for the purpose of investing. Assume you borrowed a huge sum of money in the stock market at someone’s request.
5: Invest in term insurance to cover the cost of a significant loan.
When purchasing a large house or a luxury car, the loan amount is very substantial. In addition, the repayment time is longer. There are some negative aspects to life. There should never be a time like this in your life, but if it does, this insurance will protect your family.
6: – Begin investing so that you can keep up with your loan payments.
Many consumers discover that paying house loan monthly payments (EMI) makes it impossible to save money for their next goal or retirement.
As a result, good investment planning is critical. At the end of this post, you’ll find a link to instructions on how to perform that planning.
7: Before signing your loan agreement paperwork, double-check them.
When you take out a loan from a bank or finance firm, you and the bank enter into an agreement. It is obligatory for you to sign it.
There are numerous conditions in this agreement; it is best to review them thoroughly before signing, as there will be no recourse if you do not.
Hegde, a friend of mine, had taken out a Rs 1 lakh personal loan from a financial company. Hegde even aided by closing his eyes. And the money from his loan was deposited in the bank. However, this sum was merely 91,800/-. When questioned, it was discovered that we had already deducted the interest and insurance fee as per the agreement.
Many of these elements, as well as fines, are listed in the contract. If we’ve already explained it, the head is unconcerned.
You will grasp the legal part of the loan if you have a lawyer or a chartered accountant review all of the loan documentation. It’s crucial to understand this before taking out a loan.
8: – If you acquire a low-interest loan instead of a high-interest loan, replace the high-interest loan.
Make a list of all your loans and pay off the higher-interest loan from any other low-interest lending institution. You will save money as a result of this.
Another complete loan on your insurance policy can likewise be cancelled. Low-interest loans on insurance policies are available.
Also, if you have gold, you can take a loan on it to modify the loan at a greater rate.
9: – Do not spend money set up for post-retirement needs to pay for your children’s schooling.
We Indians sometimes avoid taking out loans in order to put money towards our children’s higher education or study overseas. But don’t make that mistake.
After you retire, you will require more funds. Don’t use the money you’ve saved for anything else. Banks can provide children separate loans for higher education.
But where will the money come from if you spend the money you’ve saved? Keep this in mind when managing your money.
10: – Consult your home churches, wife, and children before taking out a loan.
When taking out such a large loan, you should obviously consult with the rest of your family. Maybe there’s another way for you to secure a loan. If your wife has any savings, she may be able to assist you. Alternatively, another approach could be pursued.
Keeping family members in the dark to make a living can add to your stress. There may be some misunderstandings. Any decision regarding a loan should be made with this in mind.
Here are ten rules to help you achieve your financial goals while also protecting you from financial disaster.
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Thank you very much.