Four rules To Remember Before Taking a Loan

In recent times, unemployment has risen notably. To counter this, the governments have been encouraging start-ups in order to reate more career opportunities. For this, several grants and loan policies have been introduced to support start-ups.

The money requirements of a start-up are easily fulfilled by taking a loan of the right value. However, the loan taker must satisfy some criteria in order to be granted the loan amount. This includes a proper credit score, relevant transaction history. Ensure that there are no pending loans or EMIs as it affects the credit score. One can find some good at money lending in toa payoh. In this digital era, it is possible to get online loans within two days if the requirements are met.

Things to Keep in Mind Before Taking a Loan

Applying for a loan should always be well-thought and based on the need. Also, the market should be assessed for applying for a loan at the right timing. It ensures that you are charged cheap ROI in the present scenario. Below are some things that need to be ensured.

Never Borrow More than you can Repay

Most of the time we are over calculative when it comes to expenses. It happens that we tend to take more loan than actually required. As the prices of things rise continually, it is vital to ensure that you have debt that you can repay. There have been several instances where loans result in bankruptcy. Having said that one should be mindful that the borrowed amount will have to be repaid with interest within the allotted time duration.

Keep Tenure as Short as Possible

The more the amount, the more years it takes for loan repayment. Although if you are capable to pay more per EMI, it may take a shorter duration. It is advised that the tenure should be as short as possible to avoid any risk in future. For example, for a 50 lac loan repayment within 20 years, the EMI you would pay on that would be around 45000 and if you increase the by 5 to 6 % then loan can be paid off easily in  about 12 years.

Ensure Timely and Regular payment

Timely repayment of loans is necessary as this also helps maintain your reputation in banking transactions. Missing an EMI or delaying a payment severely impacts your credit profile.

Don’t Borrow to Invest

It is  very important that one should not use borrowed money in investments. Fixed deposit and bonds do not always tend to match with the interest you will pay. On the other hand, investments with higher returns are too volatile.


Sometimes before taking a loan it is. Important to look back and ask the question about whether we actually need it. It is possible that yhe idea of more money is so appealing that we forget it needs to be repaid or even the purpose at times. Before applying for a loan, write down the needs and reasons why you need that amount. It helps to reflect on our decision and help to understand the actual value of money.