Did you know that borrowing does not start when you go into the bank? The first chapter of preparing for a loan is the moment you get into your brain that you need something you don’t have enough money for. It then undergoes several stages to get to the bank or to me (as a fair independent credit intermediary). In this article, I will present practices that will help you make the right decision for you! I help you connect to the infrared, help you develop our borrowing culture!
Credit is the money we will be looking for in the future, but today we want to spend it. Credit makes sense if we create value with it and not just start spending on its own!
Need- do I really need a loan or just an initial flare?
All credits start with a flare-up. We see something in the store, at our friend, or just get a nice impression. Our human instinct, our immeasurable possession, is what tells us that we must buy it. Obviously, after the desire, our way to our wallet is where we calculate, with all kinds of mathematical operations, that we actually have this money or not.
The answer is usually not. No, we don’t have enough money for a new computer, a new house, a new car. In this case, our desire is so strong that we are forced to look for alternative solutions such as credit. Thanks to the miraculous miracle of remarketing, in the coming weeks we are condemning ourselves to bombing us on every website with any pop-up ads.
Most importantly: must we decide whether this is a desire or a need? The difference between the two is that you start with the first one for self-directed spending (which you cannot afford to do), while the second wants to create value. It is forbidden to make an immediate decision to distinguish this . Adhere to the three-day rule, that is, for three days, close this head out of your head, don’t think about it, don’t think about it. Take it, and if you think you need to buy it in 3 days, it’s more than an initial flare.
Of course, spending on this can be self-directed. However, it is a proven fact that at least 50% of credit purchases are made by a sudden decision that people will regret later.
Calculation is not a question of how much money I have, but how much money I will have!
Before you make a loan, pay your installment for three months. Only in this case do you know your own limitations.
The biggest mistake in the calculations is that we record the “current financial situation” and consider it the starting point for the future. In addition, our wallet will often indicate to us that we will not have money. In this case, we make all kinds of promises in connection with saving and managing. So we produce an ideology, hiding behind it, explaining why we want to realize our desire for credit while not having the money to pay back.
I talked to one of my best friends who would like to buy a car. He looks at the repayments and came up with an amount of about 30-40e forints. He asked what I thought. My first question was how much money could you put aside in the last half year?
The answer is frustrating, “nothing”, he said.
I have translated this for what it means. “Nothing” means that it has reached zero every month thanks to regular and unexpected expenses. So in this case, a monthly repayment of 30-40e forints (+ the cost of maintaining a car) would make a huge hole in the budget and lead to a debt.
Of course he was opposed to tightening his belts and making money. In this case, the lab-based laundry mats arrive as: my fixed-cost monthly 60e HUF, I earn 200,000, so it stays at 140, of which 40 is the credit, so it remains 100e even the way I have to live.
This is not the case, since your answer would have been to put aside at least 40e forints each month. And we all know that…
In the case of long-term loans, such as car leasing or home loans, the preparation period may be an interesting concept . I have six months to justify it if it is not entirely clear after the family wallet that we will be able to pay the monthly repayment without any problems.
And anyway… If I think better, who wants to commit for 8-10-15-20 years, it should be able to spend at least six months on their own account, which will be the loan repayment (+ additional costs).
With this technique, we gain benefits such as:
- we can find out what the credit in the family budget would do
- we do not risk anything, we can say that we do not take credit because we see that we will not tolerate
- succeeds in accumulating additional safety reserves. In the best case, we start with the credit that is on our account in case of 6 month reserve problems. So we gave ourselves a 6-month lauf if it was a problem.
- in the worst case scenario, we realize that we are not allowed to borrow and we have collected some amount.
This is still a better solution than having to pay for years of unpaid credit (s)!
Important: the money collected during the trial period is not going to be
- from this we cover the borrowing costs
- let’s go straight to something nice
This money must remain intact in the security reserve dedicated to the credit!
Choose between offers and non-agents
It is a widespread misconception that an independent credit intermediary is the same consumable as a piece of pencil. That is why many people cannot appreciate the service of a good broker. They choose smoothly among the mediators and choose the one who goes better to the dog. This can create a very dangerous situation!
The task of the credit intermediary is to help our decision by looking at the offers of several banks (let’s not be a loan? What strategy to apply? How long can we go?… Etc), help in the preparation (documentation). This is a relationship of trust . That is to say, if we want to be able to work with the intermediary in 100% efficiency and we can support our case in case of problems with the bank.
Because preparing for a more serious credit is a serious thing, it is crucial that we find the person we can trust, whose professional knowledge we recognize and who we should trust our most important financial investment. If you have this man, you should no longer compete with others, not be considered consumables.
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Optimizing Costs – It can be very useful to optimize our finances in advance
I argue that a more serious credit cannot be taken from a sudden decision. Especially without getting rid of our finances before. This is why you should look at the costs of our insurance, your current account (and transfer your income to the bank you selected before you pick it up, optimizing your current account’s expense + gain on borrowing).
But it is also interesting to start using the envelope system at the latest before you borrow, which will help you reduce your unnecessary expenses.
How does the envelope system work?
The first step in the optimization process is to collect all revenue and expense in an excel table.
Revenue ranking factors:
- case by case
In the case of future childbearing, we must also calculate the lost income!
Release Ranking Factors:
- fixed edition
- average “unexpected” release on monthly basis
- entertainment items
- long-term savings
- security provisioning
- Liquid savings
- medium term savings
- expenditure on children
We have to place the monthly repayment of the loan to be taken in the family budget and the additional costs. We need to see exactly where it is in the system. You can only get credit for it if you control your finances and not your finances control you!