In America, since childhood, one can feel the heat of loans on their families. Parents take loan for their adult needs like auto loan, car loan, home loan and even personal loans as well as their children's need like student loan. Let it be to purchase a car, to buy a home, to arrange fees for tuition, higher education and even for vacation trips. After getting trapped into this, at a later stage, comes a situation where the need of loan consolidation arises. Though loan consolidation is the best way of financial management but one must be more conscious while taking various loans.
This is a very good facility to fulfill their dreams which otherwise cannot be, with their regular income. This seems to be a good way out, if everything goes smooth in personal as well as economical environment around. Small companies turn themselves into big empires. The truth is they borrow money from big financial institutions or from the open market to make it happen. After that, thru their high quality management, they pay their debt and move ahead.
In our personal life also, if we draw an action plan before taking loans, to repay it, with some contingency plans in case of original plan fails, let me assure you that we can also make it a possibility to pay our all the debts with ease. Below are some basic steps which can help anybody who is thinking to get a loan.
1. Golden rule to save yourself from this crisis to manage the things with in the available resources itself.
2. Think 10 times minimum before taking a personal loan and try to find out the every possible way to avoid it.
3. Try to manage money from other possible resources, including selling unwanted stuff lying in your backyard or putting some portion of your property on rent or think something else which you can do in your capacity before taking home loan.
4. Finalize the total car loan or home loan amount after calculating your monthly income, proposed EMI, your monthly bare required amount. Try to keep enough margins between your earnings and expenditure including the EMI for any emergency.
5. In the end of finalizing the total loan liability, try to minimize the amount of loan to maintain a good credit record.
6. Draw an action plan to re-pay the loan within the time limit. Better will be to plan for fast re-payment so that the total interest cost can be reduced.
7. After this, find out all the schemes available in the market at the time of taking the loan. Discuss with you financial advisor to find out the best one. It does not only depend on the best rate but also on the reputation of that institution. We all know how these groups do marketing for their various loan products. Once they get you, you will feel like a cheated person after 2~3 years. Be smarter in advance itself to avoid this situation later.
8. Negotiate up to the maximum for the rates. This is the only time to negotiate hard. This is because even a small fraction of percentage, say 0.25%, will cost you very high.
9. While signing the loan documents, be careful. Try to read between the lines. It is better to arrange one law person to understand the criteria and other rules and re-payment regulations listed in the broach-er.
10. As different kinds of loans are available for different kind of needs, be specific for your need and try to stick to your plan. Never try to take money for some other purpose under some different head of loan scheme.
11. In the end don’t forget the purpose of taking loan and use the loan amount for that purpose only.
If one can stick to the above rules, he can avoid all kind of troubles which most of us meet after taking the loan including the loan consolidation.
