Making a wise borrowing:
Ups and downs come in everyone’s life, sometimes you have a lot of money to fulfill all your needs and desires, and sometimes you face cash shortages or run out of cash, and all your important tasks are left unattended. You may run short of money when there is a time to pay your bills or short term credits. In case of a business, you may face cash deficits or cash shortages just about the time when you needed money to fund some important equipments or a project. So, in short the bottom line is that you have to borrow somewhere, somehow in your life either from a friend, family member, or from financial institutions. This article discusses about the best time to borrow, and ways to make a wise borrowing.
– Don’t borrow money with blind eyes, first analyze your sources of income, and calculate the maximum amount you normally earn in a particular month. After doing this, make sure that you can return the whole amount (Normally in case of a short term loan), or can pay the interest payment (Normally in case of a long-term loan) after making all other expenses. Borrowing money without making a complete analysis of your cash flow can be very dangerous.
– You should be sure that you would be able to repay the debt on due date. There are many people who borrow money just because of a hope that somehow they will arrange money to repay the debt. Though, hoping is a good idea, but practically it’s a major step towards conflicts, and losing your credibility. Do confirm your source of repayment, and if you are not convinced with the source of repayment, then try to avoid taking a loan so early, and give your decision another thought.
– Don’t borrow money to fulfill your superfluous needs like if you say I want to borrow money because I need to buy a game, this is not money is borrowed for. The best reason to borrow money is, when you borrow money to boost your future earnings, for example, you are borrowing money to fund your educations or you are going to spend it in a market ready training program. Another reason could be that you want to fund a recently won project from a reputable organization. So, you should borrow money with the intention to enhance your future income.
– Another good reason to borrow money is that you want to purchase marketable assets like property, land, financial instruments (Shares). These are the things you can recover cash from in future. The good thing is that if you face pressure of repayment, you can easily sell them in a better price. Though, shares can result in a loss, but land and building will give you profit almost every time.
– Always go for a loan if you have a solid reason, but don’t avail it for fun as in this case you normally don’t have proper plans of repayment.
– Don’t make it a habit; always go for borrowing as a last resort when you don’t find any other way to fulfill your urgent needs.
Nabeel Shaukat is the commissioned writer for Uberant [http://www.uberant.com/]. Your articles are unique, so use them to get paid. Here is the deal.