Good money management also means being able to use credit responsibly to help you achieve your financial goals.
With the rising cost of living, which seem to shrink our salaries and profits, it’s inevitable that you will need a personal loan to help fund your financial needs.
Personal Loans play an important part in your life but it’s also important to manage that credit in order to keep your finances and credit worthiness intact. Borrowing for every day expenses or for luxury items that aren’t a necessity is not a wise decision. It’s better to save up for such items and to manage every day expenses carefully within a budget. Here are five ways you can be credit savvy:
Borrow from a trusted provider: It can be very enticing to have credit providers offering you deals, but be very selective about where you borrow money. It’s safer to borrow from a bank as they are governed by strict industry rules.
Do not over extend yourself: This is where financial discipline becomes important. Avoid the temptation to borrow more than you require as this could have a negative impact on your disposable income and your credit record if you become unable to repay.
Choose a Personal Loan amount and repayment term that makes your instalment manageable: The term you choose to repay your Personal Loan is important as it directly impacts your monthly instalment Make sure you can afford your repayments.
Pay on time: Paying your Personal Loan on time is important in order to keep a good credit record, which determines your ability to get credit in future.
Pay by debit order: Paying via a debit order is one of the easiest, most reliable and cost effective ways to meet your repayment obligations.
How else do you use credit smartly?
Words: Emma Mer, CEO of FNB Personal Loans. Source: FNB