Since the loan appeared, many people have been able to improve their quality of life and increase their assets, but there are also those who have completely ruined their financial life. In other words, credit is a double-edged sword and it all depends on the use it is given.
Loans allow one to access a certain amount of money with the commitment to repay it within a certain period. If you have a clear objective, but you don’t have the necessary cash, loans are the ideal instrument. However, we can identify two types of people according to the loans they request: Those who do it out of necessity and those who have adopted it as a lifestyle.
Loans as a lifestyle:
If you asked for a loan because you spent more than the account and it is not enough to cover your expenses, it is not ideal, but if it was something at one time, you can ignore it. However, if that has become your modus operandi, it is no longer healthy. Asking for loans to pay off other loans, using the money for a different purpose and continuing to buy things, only makes you enter a carousel or vicious circle, where there is no saving capacity. Focus on canceling your debts and increasing your savings; and the next time you apply for a loan, that is with a defined objective.
Loans by necessity:
Borrowing out of necessity means that there is something we want to buy and that, at the moment, it is not enough for us to pay it in cash, so we turn to the credit and commit ourselves to paying monthly until we cancel it.
This is not bad, as long as you apply for only one loan at a time and have defined objectives for that money, that is, do not ask for more or use the money for something different. In turn, try to improve your savings capacity, so every time, the next time the amount you will need will be less. Finally, verify well the institution to which you will apply for the loan, since not all of them suit you. Compare interest rates before choosing.
Remember, the credit can be very good or very bad, the main thing is to choose well.