Borrowing money carries substantial risks and consequences. Therefore it is very important that you educate yourself with the importance of being wise borrower. Also, compare online personal loans versus bank loans.

Being a Wise Borrower = Money Saved
Wise borrowers understand the risks involved of taking out a loan. A wise borrower will save money for times of emergency and will also limit the amount of debt they carry. Bottom line, wise borrowers never put themselves in a situation that will not allow them to take care of themselves of their loved ones.

Protect Your Cash Flow
Having a decent cash flow at all times is very important. That means being disciplined enough to keep cash flowing for the entire month, every month. This will entail paying close attention to your expenses and income to make sure that you always have more money accessible prior to any expenses coming up.

Always Use Cash to Pay
You will always have a better feeling about your purchases if you pay with cash. For example, if you can save $50 a month for six months to buy a new stereo, do it. Not only will you feel better knowing that you own your purchase outright, knowing that you'll be saving money by not having to pay interest every month is also great!

Never use your credit cards to pay for food unless you intend on paying off your balance every month. It makes no sense to have to owe and pay interest for food.

Know Where You Stand
It is important that you get a copy of your credit report at least once year to know where your credit is it. Learn more. You always want to make sure that all of your info is accurate and recent.

Your credit report also contains valuable info in regards to your creditors and how much of your credit limits you are using. Lenders use this info as well as your payment history when determining whether or not to lend you money. The interest rates you receive will also be influenced by your credit history. Therefore it is very important that maintain a strong credit history.

Avoid Risky Loans
A risky loan is any type of financing that you do not understand 100%. This will also include any loan that seems too good to be true, allowing you to borrow more than you can afford. Also, loans with adjustable rates should also be avoided. These types of loans will typically have very attractive introductory rates that adjust to very high interest rates after the teaser period concludes.

Read the fine print of any loan before you commit. You don't want to put your name on any documents that you are not sure of. 

Don't Buy Anything That You Can Not Afford
Even though this is such an obvious rule of thumb, people are buying things they can't afford everyday. Buying something you will end up owning for takes the pleasure out of the purchase. Learn more not using loans to live beyond our means.

For example, suppose you are in the market for a new boat. You can either choose to buy a safe, well-running used boat for approximately $4000 or a brand new cruiser for $40,000. The new boat may look nicer and travel faster, but in reality is no better than the used boat that costs 1/10 in price. Assume that you will be paying the loan off in 5 years. $4000 for 5 years at 9% requires a monthly payment of $83.05. However, $40,000 for 5 years at 9% requires $830.54 a month! Let's say you can only go out on your boat twice/month. Would you prefer to spend $83.05 per trip or $830.54.

Don't Spend Anticipated Money
More specifically, don't spend with the anticipation that you will be able to afford your purchase because you will be earning more money in one year's time. Unless you have a contract with your employer that legally states you will be getting a raise of 'x' amount, it is very dangerous to assume. Increased income is always a possibility but never a guarantee. You never know what the future holds, you may get hurt and not be able to work, you may get laid off, etc.

Don't Co-Sign
Co-signing a loan is very dangerous. If the individual that you co-sign for neglects to make their payments, you become obligated for their debt, interest and all penalties. So, before you co-sign any loan, determine if you will be able to make the payments if the loan goes into default. Get more info about co-signing from

Pay More Than the Monthly Minimums
Pay as much as you can afford every month.

Shop Around for Your Loan Before You Borrow
Would you buy the first home or car your looked at? If you would shop around for items you are in the market for, doesn't it make sense to shop around for the best loan? Not getting the best rates and terms will equate to you having to pay much more for your loan than necessary. Learn more about effective loan shopping.

Unsecured Loan Tips
Personal Loan Scams
Compute Payments
Bad Credit Loan Information
Borrowing Advice for First Time Borrowers
Applying for Loans Online
When Refinancing a Loan Makes Sense
Advantages of Personal Loans
Are Unsecured Loans for Consolidating Debt a Good Idea?
Dangers of Debt Consolidation Loans
Cheap Personal Loans
Bad Credit Unsecured Personal Loans for Getting Rid of Bad Credit
Loan Aspects to Avoid



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