Do you want to make a major purchase or do you urgently need money to rebuild, replace or repair? But don’t you have a cent to make? No problem, you just take out a loan. At least, that is the trend nowadays.
Whereas in the old days borrowing money had to be done secretly and it was a damage to “puff”, it is nowadays the most normal thing in the world to take out a loan. From mail order credit to revolving credit , the loans – and the possibilities for this – fly you by. But to what extent is it desirable to take out a loan so easily? If you cannot pay back a loan, you can get into serious trouble.
The risks of borrowing money
“That does not happen to me, I borrow responsibly,” you may think now. But do not forget that almost everyone thinks of themselves that he or she treats money responsibly. Even after taking out a loan, an unexpected event can throw a spanner in the works, making repaying your debt suddenly a lot more difficult than anticipated. There are several scenarios that can lead to repayment problems, such as:
- become unfit for work;
- lose your job;
- unexpectedly high costs;
- changes in your living situation, so that your fixed costs are higher. For example because you are getting a divorce.
Take out a loan
Of course that does not mean that you should never take out a loan given the risks of borrowing money. But consider for yourself whether you will be able to repay this loan if you are financially less fortunate. And what about the need for the loan? Borrowing money to have your roof repaired so far, but taking out a loan to be able to buy the newest smartphone is perhaps not the smartest choice.