4 Situations When You Shouldn't Take Personal Loans
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Personal loans interest rates are one of the highest among different loan categories. Here are four situations when you shouldn't take personal loans.
Hello and welcome to FundooMoney, your 24X7 buddy for all your money matters. Personal loans are easily accessible and they are marketed aggressively since they are so lucrative for lending institutions. But as many of us are aware, they are one of the most expensive loans. If a person takes a personal loan without due to consideration to factors such as repayment capacity, it could cause irreparable damage to a family’s finances. In particular, there are four occasions when some people take personal loans but they shouldn’t. Which are these situations? We discuss them in just a little while.
Here are four occasions when you should not take a personal loan.
A celebration
Many times social pressures and our misplaced sense of priorities can cause long term financial damage. Celebrations and functions such as marriage and birthday parties are often occasions when people take personal loans to bridge any cash shortfall. Avoid such a mistake at any cost. What you spend in those few hours typically sets your family back financially, by years.
Expensive gadgets
One way of never living beyond your means and having to rely on expensive loans like personal loans, is to ask yourself what you want and what you need. This is important in case of expensive gadgets that we all long for. If it is beyond your means i.e. within our savings and income, there is little logic in taking a personal loan to finance the purchase of the gadget. Remember, there is life after buying the gadget where money is required to meet important family requirements. The same is true for your family’s major needs like child’s higher education and your retirement.
Your hobbies
There are many hobbies like some adventure sports that can be expensive and can stretch anybody’s budget. As with gadgets, you should avoid taking a personal loan to finance them.
Speculative purposes
There are investors who regularly get lured to invest and multiply their money in “flavour of the season” investments. If that is not bad enough, since most of them lose their hard earned money, many of them take personal loans to fund these investments. This makes the recovery from any financial disaster even longer. Never ever take a personal loan for speculative investments. Remember, paying a high interest rate is a reality while getting the high promised return isn’t. Stay away from this recipe of disaster and keep your family financially secure.
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