Here is where you will find information that the general public is not aware of. Though most people would like to think that traditional lending institutions have their best interest at heart, that is usually not the case. Lending institutions are in the business of making money. Through APR rates, fees and even hidden charges, this mega business affects everyone the same irrespective of age, qualification or financial status. At some point in time, everyone from the college student, to the entrepreneur, to the government itself, will need a loan. The financial sector forms the single largest employer in the modern world and there are some valuable and simple tips and tricks about loans that need to be known.
Simple communication with an individual may assist in their decision to borrow money. It is known that information is power and once a borrower is equipped with the necessary information needed to proceed with the transaction; this level of communication can help the borrower make the best decision for themselves. Some of the tips and tricks about loans are as simple as informing someone, to borrow responsibly. A simple statement, but over looked at the time of the transaction. Also, borrowers should borrow to buy an asset that shall appreciate in value or bring in future dividends. This makes better sense than borrowing to mark up an individual’s ego/status. As a thumb rule your monthly loan repayment obligation should be less than 33% of your take home salary. Borrowers should always be safe if they stay under this radar of 33%, which has been established by all kinds of lending institutions in many parts of the world.
For young people, receiving loan advise should be done, as it would be wise to begin to learn about the operations of financial institutions early, because again, at some point in time, we all need to obtain a loan. Borrowing at a young age when your income is low, helps you easily repay back your loans as the loan EMI remains constant but your income rises each year. This is also a time for young people to contemplate purchasing a home; however, no one should advice you to carry a debt into your retirement age, so be aware of mortgages that encourage a 30 year commitment. By middle age your income and your saleable skill set stagnates.
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