The Importance of Borrowing Responsibly

Borrowing money is a decision that should not be taken lightly. When you borrow money, you risk spiralling into debt if you cannot make the repayments. Not only this, but you risk a bad credit score (or damaging an already unhealthy score), which will stop you from being able to take out loans at all in the future.

In recent years, the habit of taken out loans and using credit cards has had a huge effect on the British public. Debt is widespread and it is only in the last few years that banks have stopped giving loans and credit cards to everyone who applied for them.

What many people do not think about is the interest rates and how higher rates can make a loan even harder to pay off. Even low interest rates add on to the money you initially borrowed, meaning that if you donât pay a debt off quickly, you can end up paying hundreds of pounds extra on top of your loans.

So when you consider taking out a loan, you have to be sure that you can pay it back in the instalments required (usually a monthly minimum amount).