Sorry for not posting these past few days as I was suppose to do.
My mind got a bit clouded with stuff that includes the Stock Market.
For now, let's get back to Personal Finance shall we?
When I was still dependent from my parents, getting a loan from them was easy. They love me and they would forget about it. However, as a grown adult, that won't be the same since my parents have their own needs and they might be the ones who would need my assistance in the future.
In the corporate world, there may be times that we may need to borrow money to take care of our personal needs. These may include (but not limited to) the following.
a. Leverage for an Investment
b. Medical Expenses
c. Educational Expenses
d. Housing Repair/Improvement
I'm sure you have more that what is listed above but that's for now.
Anyway, My own criteria to consider before getting a personal loan would be the following.
1. Do you really need it Right Now?
Say you need this amount for you to cover your kid's education for the coming school year and that would be six months from now. When you try to loan that amount, what would you do for the next six months aside from paying the loan (plus interest)?
For me, I'd rather delay it and work my budget for the next six months to be able to come-up with the money needed. In case if it isn't enough, that's the time I'd get a loan, but a lower amount compared to what would be the initial loan amount.
2. Can I pay it within the shortest time possible?
Give that you were granted a loan amount you needed, can you pay it within the shortest amount of time possible? Say you need to pay it within a year, but there are unavoidable instances that you need to use that money that should have been for loan payment for something else. Would you extend your loan payment to make-up for the loss? Would you borrow money just to pay for that payment (which leads to additional debt)?
That's my take. Do you have any other ideas? Feel free to share yours in the comment section.
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