Paperwork and real life experiences are always different at some points. So while making what you assume a solid plan, be prepared for some unforeseen lapses. In this article, we are going to focus on how strategic one can be when trying to access funds. Over here, the loan charge rates are high. Being careful when picking one should be a priority.
Yes, The General language of taking a debt to pay debt or pouring it direction into expenses is not encouraging. Financial discipline should always be something applied on time but as we see it, many always learn when they are already inside such pressure. It will be a running here and there experience to cover up and yes, in the middle of several other expenses.
Sometimes splitting loans in-between several persons or loan apps can seem a good idea. It is ALL about your calculations and a poor one can backfire. For instance you just borrowed some funds from different sets of friends and they happen to be on demand at close range. How do you resolve it? It may have to be through another short term loan and the cycle continues.
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The fact is when one is in-between financial uncertainties, going short can be a loss. We all know what ‘assumed money’ is. People may be owning you or perhaps you are awaiting a promised work or contracts. It will b a bad idea to assume that any of such money will reach you on D-Day. At least as an entrepreneur I have had such experiences and what can you do?
Deals do fail, fixed dates on payments do get postponed. We are running an economy of debts upon debts and it is not surprising how money can be scarce especially when dealing with the middle class belt. Did you take a loan ahead? Of course you know you will have to pay. Those firms are not after your own short falls; your reputation is at risk here. You wouldn't want to fall victim to a credit score.
So how should such situations be addressed? Actually it is not that I am bringing in a standard way of dealing with it but I am considering its advantage here. Don't you think it is much better to owe one person long while looking for ways to get out of your debt hole?. I am not trying to fan up bad debts here but it makes much more sense if you can get a long term breathing space while you gradually chop into your debt pile.
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Let's take for instance, a six month instalment debt repayment will attract much more charge than one month but on a broader view, it will serve you a lot of financial panics. It is about making the right calculations here. If a 250K loan would demand you repay maybe around 60K monthly for six months, it makes some sense. I am not saying I do enjoy those huge charges in-between. My consideration here is first how easy it will be for you to be able to access 60K every 30 days.
Assuming your financial calculations fail in the three continuous months, it means you will have to get an external loan to cover up the deficits. You will NOW be running around the fee Circle. The fact is you may end up spending something close to 200K in entire fees within four months, worst of all, you are still not able to get out of the current hole.
To conclude, let me add, no man is an island of knowledge so we keep learning from others. If you are about to enter into some form of loan, make sure it is a healthy one. Always expand repayment tenures to fit in a stress-free monthly repayment amount. You never can tell those unforeseen extra expenses that will be coming in within the month and in the end you may end up finding yourself inside a depressing financial situation.
Posted Using INLEO