There is a misconception that people who avail of bank loans have mismanaged their finances, but that isn't necessarily true. There are varied reasons for needing extra cash. A majority of responsible adults use loans to achieve their goals sooner. It may be a need to renovate the house to accommodate additional members of the family, parents who aim to provide only the best for their children, or family members who want to respond to a family emergency. For others, it's to see their business idea through, and make their dream of having a side business a reality. When well-managed, loans can be used to get ahead and improve the quality of life.
So how do these people stay on top of their finances? There are two basic things you need to remember about personal loans. First, by definition, they need to be paid back according to agreement, and second, they should be used for your intended purpose.
Remember that loans are borrowed, not given. It should go without saying, but some people take their loans for granted. Once the cash is on hand, or the desired item is in possession, there may be a tendency to forget that the money used was merely advanced. To avoid any trouble with loans, the sensible course is laying down a plan for payment.
Keep a steady flow of income. When you apply for a loan, you will be asked to show proof of financial capacity and are expected to maintain such capacity until the loan is paid off. To ensure a steady flow of money is coming in, people avoid making lifestyle changes that may drastically affect their regular cash flow. These include putting off quitting a job or making another large purchase.
Know how to budget accordingly. People who have loans to pay off know that some adjustments are in order. Instead of budgeting with expenses as a priority, they set aside the amount for their loan payment first, before allocating the remaining funds for expenses. Remember: the money you borrowed has been spent, while your expenses can still be regulated.
Mark your calendar, set alarms and notifications. Making sure that your post-dated checks are cleared as you pay back your loan amount is very important, so plotting notable dates on the calendar safeguards against forgetfulness. Some suggest marking several days earlier than the actual deadline to give time for getting finances in order. Since we usually have our gadgets with us 24/7, people have been taking advantage by setting notifications specifically as a fail-proof reminder.
Have one purpose for your loan. Without the proper mindset, having instant, extra cash may waylay plans. When loans are taken out for a specific purpose, people are encouraged to use it for that purpose alone. To steer away from the temptation of misappropriating the funds, loan amounts are made specific to the need and no more.
For those with multiple, ongoing loans, taking out a personal loan for debt consolidation is an option. They give the option to pay off other outstanding loans, and are usually offered at a lower interest rate. This provides the convenience of servicing just one loan and makes it easier to manage.
So long as these concepts are clear, loans can be just the boost you need to turn your and dreams into reality.
For any concerns, you may call us at (632) 8995-9999 or send us a message through www.citibank.com.ph.
Citibank, N.A. Philippine Branch is supervised by Bangko Sentral ng Pilipinas with telephone number (632) 8708-7087.