The main reasons why you can not take a loan
The availability of credit programs daily tempts to quickly solve current problems, without thinking about what will happen next. The situation by 2018 led to an increase in the debt of Russians to more than 150 thousand rubles per person, and the average monthly income of about 30 thousand rubles. It is easy to calculate that, taking into account the daily expenses for life, citizens can hardly pay their debts for a year. There are reasonable doubts: is it true the bank’s funds will be able to resolve the issue?
Do I need to take a loan
According to analysts, in the second half of 2018, a new wave of bankruptcies of financial organizations and individuals who are unable to service accumulated debts is likely. The problem concerns those debtors who made rash expenditures, issuing new credit obligations to MFIs and banks that give loans without refusal. The lending business aims to make a profit, and high-risk transactions with minimum requirements for borrowers are forced to assign excessive interest rates. The lender will try to squeeze the maximum out of the client even in the most difficult position, but the borrower will long experience all the negative consequences of such lending.
What loan is not worth taking
A reasonable person will think many times before contacting the bank, knowing that for every foreign penny you will have to pay twice. Other citizens quietly live in expensive apartments, drive on new models of the foreign car industry, enjoy current benefits without thinking about future payback. Faced with a proposal, at first very profitable, carefully weigh whether you need to take out a loan. An interactive test about the validity of a loan will correctly place accents, because sometimes borrowed funds allow a hopeless situation and even bear the benefit of the borrower.
Credit to maintain the previous level of life
Bank funds help to maintain the standard of living when income decreases, earnings are lost. However, such a solution is a temporary delay, after which even greater problems will have to be solved.
The growth in the number of unemployed citizens of working age does not inspire optimism when a person, taking money from a bank, expects to quickly find a good job with high pay. In a situation of economic instability such expectations are the fate of brave citizens, but far from the realities of life. After 5-7 months, the debt turns into irrevocable. The borrower is aware that he cannot maintain the same lifestyle that he had with high wages.
It’s time to rethink your life, commensurate with real incomes and expenses.
Credit purchases with the risk of loss of liquidity
Dreams of any driver – a comfortable car, in which serious distances are overcome without fatigue, does not require constant investments in repairs. However, for an expensive foreign car hiding serious debts to the creditor, the obligation to pay for comprehensive insurance, additional costs for 3-5 years. During the service, the car loses its price, there are problems that require investments in repairs. By the end of the payments, the borrower loses on the interest overpayment and involuntary insurance an amount equivalent to the initial price of the car without a run. The future sale of a car that has lost at least 20% of its price is non-profit.
Similarly consider the purchase of jewelry (excluding antiques, which over the years only increase in price).
Spending up to 40–50% of income on the purchase of items for reputation, the borrower refuses to satisfy his immediate needs, maintains a false high status.
Loan for the loan
A person takes a loan at a high percentage, yielding to assurances of the benefit of an instant credit card. Soon he discovers that there are offers on the lending market with a lower rate. It is logical to appeal to the refinancing program to close previous debts.
Yes, the percentage of this program is lower than the previous rate of the first lender, but with the final benefit, not everything is so easy. The simplest mathematical calculations on an online calculator will show that more often there is no benefit:
- Annuity payment settlement scheme means priority interest repayment at the very beginning of lending, and the principal debt is practically not reduced. This is profitable in the first half of the payout period. Taking a new loan to pay off the debt at the end of the term of the first contract, the borrower subscribes to the conditions. According to them, he is forced to pay interest on the loan first, slightly reducing the total debt.
- Already when signing the contract, the borrower detects the need for additional spending on options, services, service of the second lender. This makes doubtful the savings from replacing the existing debt with a new one.
- Sometimes programs, unlike initial conditions, are not so profitable. Examine the terms of the new loan before signing the loan agreement.
What is better refinancing or a new loan in the bank? Refinancing Loan!
If there are difficulties in servicing the current debt, we advise you to immediately communicate with the lender and ask you to restructure the existing debt by revising the terms of the loan within the same financial institution. It would be economically justified to apply for a new agreement to another bank if it was not possible to change the terms of the loan. The difference in the total overpayment in percentage exceeded 4 points.
Credit just in case
You get used to good quickly, and then it’s harder to refuse comfort. When financial requests exceed real income, a person draws up a loan, but when paid, he realizes that it would be nice to make another expensive purchase. Many financial institutions, when considering applications from potential customers, assess the ability to pay, incur increased costs of servicing credit debts, taking into account the new loan. However, there are cases when a creditor, by protecting itself with a high interest on a loan, gives loans to any candidate.
In order not to face a situation when all the income is not enough to service the loans, give up the time of purchase. This will keep the relative stability of your financial situation. Consider other ways to get the right thing without resorting to borrowed money . There are no legal ways not to pay the loan without consequences for the borrower. To avoid bankruptcy, loss of property and restrictions, when signing a new loan agreement, you need to remember that you have to pay anyway. If not with money, then with time spent, nerves, limited civil rights.
A microloan and mega consequences
When a bank refuses to issue money, and the situation requires an urgent decision, citizens turn to the last resort – a loan through a microfinance organization:
- with consideration of the application within 5–15 minutes;
- transfer of funds to any card;
- registration remotely, without references and accounting of a credit history.
The statistics of cooperation with MFIs clearly shows that it will be difficult to part with such a lender. The structures themselves, charging daily overpayment in hundreds and thousands of percent in annual terms.
The borrower takes 20 thousand rubles and does not have time to pay on time (usually not more than a month) the entire amount, along with interest. Now he has to spend every month 10 thousand rubles only to service the debt, without reducing the principal balance. A few months later, the borrower understands that the overpayment has already exceeded the initial loan size several times, and for the final closure of the debt, alternative sources of financing will have to be found.
A loan from an MFI is taken in full confidence that in a couple of weeks the necessary amount will appear, which overlaps the debt in excess. When making the last payment, they are required to provide a certificate of the absence of financial and other claims against the borrower.
Loan with fine print terms
Signing a contract with the bank, competent borrowers read it carefully. In reality, anticipating the receipt of the required amount, rare citizens take a document to study in advance and consult with a lawyer. Psychological reception, when the borrower has already internally tuned to receive money, gives employees to add conditions to the contract that, when repaying the debt, will cause a lot of trouble to the payer.
Examine the contract and check the items in the text:
- allowing unilaterally to change the rate;
- about the extra cost of unnecessary options.
If there are ambiguities, ask questions to the manager, ask again and ask for clarifications. For example, incomprehensible clauses are included in the signed agreement or additional financial obligations are imposed on the borrower. We advise you to abandon the loan and find other ways out of financial problems.
Exceptions to the rules
The benefit of the loan is a rare situation, but this is also possible. Before the loan, answer the following questions:
- What are the benefits of a loan?
- What are the financial implications if you don’t use the loan now?
- What is the total overpayment? What price will have to be paid for solving current problems with borrowed funds?
If the loan will allow you to avoid even greater costs or lead to income, it makes sense to study the loan program.
Examples of situations where borrowed funds can be taken:
- Money is needed to make a profit in a short time. Sometimes a start-up needs a small financial investment, and the income from transactions is guaranteed. There are many successful examples, but there is a risk of miscalculation. Then the entrepreneur incurs a loss in the form of interest and related expenses. Others draw up a loan agreement to buy a valuable item, taking advantage of a temporary decline in the market price. In the near future, at the resale, bank interest will return and profit will remain.
- Bank funds go to the purchase of mortgage real estate. In a situation when real estate prices are constantly growing, instead of rent for a rental living space, the mortgage agreement fixes the price and expenses for the purchase of a comfortable apartment. More recently, this lending option was economical. After a long fall in real estate prices, the choice in favor of a mortgage loan is justified after careful analysis:
- the final price of the housing loan;
- insurance costs;
- loan processing prices.
There are no standard ways out of life situations, however, if you want to use borrowed funds, it’s time to analyze your life.