Now and then we face financial circumstances that make us apply for varied types of loans. Personal loans, auto loans, student loans, business loans, payday loans etc. for which we explore the market. Our choice of loans immediately affects our personal finances. We should know how to choose a financial product smartly. Lower rates, flexible instalments, desired tenure etc. are among the priorities.

To avoid any regretful borrowing decision on the lender, you must follow some rules. Here are they –

Decide- Are you taking the loan for a need or just a desire?

Do not take loans because they are available in abundance. Borrowing money always affect your financial future. Any type of credit consumes space in creditworthiness. Always borrow for an actual need and not for a moody desire.

Responsible borrowing (for needs)Irresponsible borrowing (for desires and fun)
For Medical reasons/emergencyFor party
For Professional/business tripFor weekend trips
For additional assistance in a big purchaseFor (unnecessary) shopping
For wedding arrangementsFor any random or moody reason
For abroad or higher educationFor investment purpose

When you borrow for an actual need, you are more cautious about the terms and conditions and scrutinize the policy of the lenders. This attitude, in turn, makes you take a smart decision. While on the other hand, when you borrow for a wish or materialistic want, you rush to get the fund. This haste is the reason that gives the loan companies a chance to take your benefit.

Use financial tools – Calculator and budget planner for a rational approach

Financial tools provide you with an estimation of the cost of a loan and its impact on your finances. A loan calculator shows the monthly instalments, the rate and the overall cost. With the budget planner, you can mention the expenses with loan repayments as an additional monthly expense. The total amount can tell you quickly, how affordable is the borrowing for you. It is the golden rule that does not borrow the amount that is larger than your repaying capacity.

Hire a broker for professional assistance and vast options

Finance is always a complicated subject for people. Many do not even know what can severely affect their credit score. Same is the situation in the loan decisions. People do not know much about the lending industry and how to judge the options.

A broker can always tell you what is best and also can find the most suitable deals. Above all, it tackles the documentation part. You need to sit back and relax to get funds in your bank account. If you want to add more convenience to this experience, then the world of online brokerservices is open for you. Everything happens, from application to approval and fund disbursement.

Tenure should be short AS MUCH AS POSSIBLE

Of course, the longer tenure gives you the comfort of smaller loan instalments that sound affordable and fit in the monthly budget. However, in total, you pay a massive amount because the long tenure is the prime cause of more interest paid on loan.

Calculate your expenses and try to figure out the possibilities of paying a bigger instalment for a shorter tenure. After all, it saves you a considerable amount with decreased interest rates. Besides, it helps you get rid of the obligation.

Look for additional features

Different lenders accompany their loan products with additional features for the ease of the borrowers. To have a good deal, you should try to find an option with maximum features and facilities.

  • Instant decision
  • Flexible repayment plans
  • No prepayment charges
  • Timely disbursal

Discount offers for existing borrowers

There can be many more on the list. Explore the market, and you can find many things to be considered beneficial if they add with your loan deal.


The above suggestions help you stay patient and take wise decisions on loan borrowing.  Every small or big financial decision can leave a long-term impact if taken carelessly. Stay wise, calm and rational because these are the pillars of stability in life. One wrong decision can create big chaos. The thumb rule is, always take care of the total cost of the loan; it should not go high. The sensible turns of today take you to the destination of tomorrow safely and surely.

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