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Dos and Don'ts of Borrowing Money

Borrowing money entails responsibilities and financial consequences. If you're not careful enough you may end up with more problems than before. To avoid burying yourself in more debt, below are practical do's and don'ts to keep in mind when applying for a personal loan.


The Do's

Do shop around. To land the cheapest and the best deals on your logbook loan, it's best to shop around first. It's just like with type of shopping, you need to look around and compare your choices to find one that suits your needs best. To start comparing logbook loans with other types of personal loans, you can go to http://www.moneysupermarket.com/loans/.

Do research about the product. To really know what you're getting into especially the risks involved, you need to research about the financial product prior to applying. In fact, you should call your lender and ask questions you need answered while you're at it.

Do investigate the interest rate. When shopping for personal loans, one of the most important factors to look at is the interest rate. To be exact, you need to compare and investigate Representative APRs. APR or annual percentage rate is what will tell you about the total cost of the loan.

Do seek recommendations. If you know family, friends or colleagues who have applied for a personal loan before, ask for their recommendations. It's easier to decide when you have tips and guidelines from people who have firsthand experience with borrowing money.

The Don'ts

Do not pick the first deal. With literally thousands of personal loan deals available online and in the high street, picking one might pose a problem. Even so, never pick the first deal you see or think is good enough. You need to research, shop around and better yet use comparison sites to sift through your options well.

Do not apply without assessing your needs. Another important thing to never do is apply without prior knowledge of your needs and budget. Remember that borrowing money can either make or break your financial circumstance. To use it for your advantage, you need to carefully plan things by first assessing your needs and setting your budget for repayment.

Do not borrow what you cannot afford. With loans such as logbook loans where a security is involved, you cannot afford to borrow more than your means unless you want to risk losing your car. As a simple rule, only stick with borrowing what you can afford to pay.