Whether you are buying a new house, a new car, want to go on holiday or are planning to refurbish a kitchen, there are many reasons why we choose to borrow money. When we take out a loan, for whatever reason, we want to make sure that we borrow the right amount and that we don’t end up with either too little or too much money.
If you are thinking about taking out a loan, or are trying to work out how much you should borrow, then read the following advice on how to avoid getting into too much debt.
There is no better way to determine how much monthly repayments will be, than by using a loan calculator. Calculators designed for working out finances regarding loans enable users to analyse different sized loans from different lenders, indicating what you will need to pay back each month.
By simply entering how much you need to borrow and over how long, you will be able to get a better picture of what size loan you need. This reduces the risk of you borrowing too much money and struggling to make repayments.
When researching different loan packages, you may want to look at the Co-operative Bank, which offers personal loans at highly competitive rates. Their website has a loan calculator, which will provide you with an instant evaluation of what your monthly repayments could be.
If you are considering borrowing money, it is wise to go and see an independent financial adviser (IFA) who will be able to advise you on every aspect of your finances. An IFA will be able to assess what areas of your personal finances can be improved, helping you work out exactly how much you need to borrow.
When you are considering taking out a loan of any shape or form you will need to carefully work out what you need the money for, how much you need to borrow, how long you want the loan to last and what monthly repayments you can afford to make.
This means going over your finances with a fine-tooth comb and establishing exactly how much expendable income you have at the end of each month. Remember to consider all the costs you will pay out – from utility bills and fees for TV licences to insurance premiums, petrol costs and food bills – and keep a clear record of how much you spend.
It is always wise to be thorough with your financial management. It may be worth setting up a routine whereby you check your bank statements against receipts and other documents on a monthly basis. Setting up online banking for your accounts and monitoring your finances on a daily basis is also recommended. You can always open separate accounts for use on different expenditures, making it easier to manage your money.