Responsible BorrowingAndrew Francisco
Some people think that loans are bad. But that’s not necessarily true. Many businesses have utilized loans to finance their growth. Yet to a lot of people, any debt is bad debt. Like businesses, individuals can also use loans for growth. The key is responsible borrowing.
As a responsible borrower you must borrow only within your means. Don’t borrow anything that you cannot pay within the loan term. You can check your debt-to-income ratio to see if you are borrowing too much compared to your income, just divide your monthly debt payments by your monthly income. If your ratio falls below 1.0, then you should probably stop taking loans.
Always read the fine print of your loans. Make sure that you don’t fall into the trap of exorbitant hidden charges. Worse, penalties will pile up should you be unable to pay your loan on the specified time. For example, with Atome you can get the exact amount you asked for and you see exactly the amount you have to pay, broken down into Interest, Service Fee, and Sign-Up Fee.
Borrow only from reputable sources. There are plenty of scams out there. Make sure to borrow only from legitimate financing companies. You can follow these steps to protect yourself from falling victim to a fake company:
- If it’s too good to be true, then it probably is. If the offer is not realistic, be wary.
- Avoid loans that require upfront fees.
- Avoid loan offers from random phone numbers and email addresses. Make sure that you only contact the company through officially recognized channels.
- Google the name of the company to see if anyone claims to have been scammed by them.
- Check reviews about the company online.
- Check for the company’s phone number and address, if possible verify if this is correct.
- Check the Securities and Exchange Commission (SEC) to see if the company is registered.
*Just make sure that you know the brand name and the company name. In Atome’s case, it is under Neuroncredit Financing Company Inc.
Make sure that you are able to pay on time. Paying for a loan on-time may also increase your credit score. Which means better products and rates for you in the future.
To be sure that you are able to pay for your loans on-time, make sure that you are able to budget accordingly, allocate enough for your repayment on your due date.
Remember, a loan is an obligation that you have to pay. An obligation that you have made to the lender, not the other way around. You have agreed to a particular amount and a particular due date. Pay on time and you will reap the rewards.