I recently paid off a bank loan in November of last year….. it was such a great feeling that left me 155 better off a month which I have now ploughed into my credit card to also pay off.
The pitfalls of a personal loan is that when we are really strapped for cash there is always someone who is willing to lend us money, at a price. They pick on people who can really ill afford repayments, and charge high interest as they know at the end of the day, most people who are seeking loans will do anything to get the money they want for whatever it is they need it for, i.e. holiday, new furniture, household decor, etc. I found myself paying off an overdraft and having a mini break and it took me 3 years to clear off the debt. I did pay heavily for it but now its finished, I will never ever use a bank loan to get what I want.
The way things are going at the moment with a threat of a recession, the last one that happened affected me but not not too much, as I don’t own my property and rent and have controlled rent, but I know people who owed more money each month than they had coming in and in the end, never had any money left for normal expenses to live on till their next pay day…. this is just no way to live, but people live like this and take out credit cards, which is s totally ludicrous way to live and then say it helps. Most cards have an annual interest rate far exceeding the annual rate of inflation and charge you penalties if you are late paying regardless if you let them know and then over limit fees.
I would urge everyone who reads this article to not take out a personal loan. Even if it is to amalgamate your debts, you land up worse off and have to commit yourself for a lot longer period and land up paying nearly 50% back on top of what you originally owed in the first place, just for the sake of paying less each month.
I cant exactly say I have loads of savings, but at the same time, I now live within my means and if I have not got it, then I will either go without whatever it is or save some money for what it is I am after. Even on holiday. I will not live on credit now when I go away, I have enough spending money for the holiday and when its gone, its gone. I don’t want to be paying off a credit card for a holiday I had months ago.
It is easier said than done I know, especially when you have a family and I have only myself to look after, but don’t get caught up in the lures of loans. Think before you go for one and seek financial advice from someone who is not going to gain from your misfortune.