Are you thinking about borrowing some cash? Here are the Crester 10 Commandments of Borrowing Money to help you make a decision about applying for a loan in New Zealand.
1. Thou shalt have proper reason to borrow
What’s going on in your life? Put it to paper. Do you really need to borrow money to get out of your situation? Okay, if your car is dying and you need transport to get to work, then a car loan can help. If you need a business equipment loan then go for it. Debt consolidation loans are always a great stress reliever and can help you shift your debts into one monthly payment. However, if you want a flash car or a luxury holiday consider saving for it before borrowing money.
2. Thou shalt have your family’s support
Okay, so life can get a tad tricky! Whether you need beneficiary loans, bond loans, debt consolidation loans, personal loans, or you’re facing another big finance decision, you need support from your loved ones. Ensure your family are on board with the decision as they could end up having to fish you out if you get into difficulties.
3. Thou shalt not become a slave to money
If you already have other debts such as an overdraft, credit card, store cards or store credit etc, consider paying these off before getting into further debt. Or get one consolidation loan to merge them all into one more affordable payment. Avoid taking on loan after loan just to stay afloat as this will just prolong your situation.
4. Thou shalt go in with eyes wide open
Learn and understand exactly what will take place during the loan period. Interest rates, loan fees, terms and conditions, and security collateral all matter when taking on a loan. It is important that you completely understand what you are signing up for, and what the real cost of borrowing will be for the whole period. Don’t forget about other costs that you could incur, such as penalties for late or non-payment, early repayment fees and any admin charges that you might be liable for.
5. Thou shalt honour your loan requirements
Maintaining a solid relationship with your finance company is crucial for any potential loans you may need in the future. If you honour your payment plan, and communicate with your finance company should you have difficulties, life becomes a lot easier down the track. Not sticking to the terms of your loan can make it more expensive in the long run, and you may find yourself unable to get further loans or credit in the future.
6. Thou shalt not lie to your lender
There is no point in lying on your application or trying to deceive your lender. They all do their homework before lending to new customers. An honourable finance company won’t want to lend to you if it is actually going to put you in greater hardship down the track.
7. Thou shalt not commit fraud
Falsifying your paperwork or obtaining money through deceptive means can be fraud. Fraud can land you anywhere up to 10 years imprisonment, and could cause hardship for genuine finance companies trying to help people.
8. Thou shalt not steal
As with number 7 above, this one’s simple. Borrowing money without the intention to pay it back is theft and is a serious offence in New Zealand.
9. Thou shalt read the terms and conditions
10. Thou shalt not covet
What do you really need? What does your family need? What’s really important to you and your family? Do you really need some short-term financial help or are you just trying to keep up with the Joneses or get the latest gadget because everyone else has one? Once you address these questions, it should clarify whether you really need a loan.
Crester Credit are responsible lenders and aim to lend only to people that we believe can realistically afford to repay their loan.