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Guidelines on How to Become a Smart Borrower

Financial security is one of the lifestyle staples that we always strive to achieve. We work hard. We earn. We spend. And the cycle keeps going.

Regardless of how we aim for financial stability, it has become an acceptable natural order that we live in a society where most people, if not all, spend beyond their financial means. If only we can be frugal all the time, like how they do it in China; unfortunately, not everyone can.

There will be times when we’ll need to jump outside our monetary fence to make our plans happen, most especially if it involves bigger personal goals, like starting our own business, buying a new house, or paying accumulated debts, just to name a few. Thus, we resort to applying for a loan. Now, the question is — how to do it the smart way?

Here are some practical ways for you to become a smart borrower:

Set your preferences

Before applying for a loan, check out different loan packages online. There are different platforms available that you can visit to determine your preferences. You should know what kind of loan suits you, the terms of payment you can afford, and the ways to pay for it. The point is, always be realistic. There are hundreds of loan offerings out there, but always go the extra mile to check them out before going further.

The lenders will not be held liable for things that are already well-explained in the documents. (Image: pixabay / CC0 1.0)
The lenders will not be held liable for things that are already well-explained in the documents. (Image: pixabay / CC0 1.0)

Ask questions

When you finally find the loan option that suits you, get in touch with the bank to discuss the necessary requirements needed for the application. Don’t be hesitant to ask questions. It’s inevitable that there are some aspects of the loan process that are quite confusing, especially when it comes to charges that the bank may throw at you. That’s why it’s wise to ask questions, so as to avoid confusion and disappointment in the future. There’s no harm in asking, after all.

Make reading a habit

Although trusting is good, verifying is gold. The bank official will explain to you every aspect of the loan, but still read everything. Read carefully and make sure to comprehend what you’re reading. In case there’s a part that is vague, you can make clarifications right away. The lenders will not be held liable for things that are already well-explained in the documents.

Don’t be hesitant to ask questions. (Image: pixabay / CC0 1.0)
Don’t be hesitant to ask questions. (Image: pixabay / CC0 1.0)

Spend your money wisely

Always act responsibly, especially when it comes to spending. Don’t spend your borrowed money recklessly. Suppress the temptation of spending it on unnecessary things, and always remember the reason why you borrowed money in the first place. Keep tabs on all the expenditures with the money you borrowed.


Avoid borrowing money for its own sake. Besides borrowing and spending money wisely, it is crucial you know how to settle loans accordingly to prevent any future burdens. If you fulfill your responsibilities to your creditors, it will become easier for you next time.

Susan Culp is a renowned business blogger and financial market enthusiast. She is an active advocate of financial freedom and is consistently promoting different platforms like Moneybanker. Susan is also fond of reading about stock markets and innovations happening on the international scene. In her free time, she devotes herself of traveling in different countries to learn more about cultures and strategies when it comes to developing and growing businesses.

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