Are 3 important things before borrowing money

Financial planning may not go according to plan. Although various means saving and saving is done, there are still things that often happens as unexpected expenses.
Borrowing money is often an option to resolve the financial problems. Before deciding to borrow money, consideration should be thought through is if you can pay it off.
The following are three considerations before deciding to borrow money:

1. The amount borrowed

When we apply for a loan of course there are conditions that must be met. The bank or lender will check our financial condition, ranging from employment status and length of our work, the monthly income and other loans that we might have.
For that you have to be able to measure whether the ability to restore the amount of money that we borrow within a specified time or not. If you need a little bit but was offered a higher amount, you should not take it all. Adjust to your needs and abilities.

2. Interest on loans

Interest loans vary widely, depending on the lender and type of loan, in addition to factors related to our own credibility. So it is very important that personally know the interest rate of the proposed loan.
Remember this interest rate would have an impact on installments per month. In addition, we also have to understand how interest is calculated.
Before signing the agreement, ask for a detailed explanation of the calculation of interest rates, how much the amount of money available, and how they change when we change the monthly payment and term loan.
In short, do not accept everything as it is. Generally, borrowing money from the bank can be very expensive.

3. Other costs

Not only the interest alone that makes loans can be expensive, but sometimes banks charge other costs. Starting from the administration, penalties, deductions and so on. You have to know in detail about all the costs that arise when borrowing money from a bank.
Other costs that may be described in the beginning but will show up when things go wrong is fine and the consequences of not being able to pay off or default.
Although we do not expect that to happen, but we must know the correct procedure if it really can not repay the loan, including the costs and other consequences that may not have been stated in the agreement.
If using auto-debit system in the repayments, try a few days payment due upon receipt of a salary. This prevents late if the current salaries paid by where we work.

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