You already understand my general mindset about loans\u2026
\nHere are some mistakes clients make that are a surefire recipe for ruining their lives:<\/p>\n
Your bank overdraft has grown. The bank called to offer a loan to cover the overdraft increase and the fact that you exceeded the credit limit the bank approves for you. On the surface, the bank’s offer seems better because the interest rate is better and fixed loan repayments will force you to deal with the situation you’ve gotten into. <\/p>\n
But there are two common traps here:
\n1) If the overdraft is growing, it means your expenses are higher than your income. If you add another expense of a monthly loan payment, what will happen to your cash flow next month when it includes the loan too? <\/p>\n
2) You took the loan but didn’t reset your bank account credit limit so you can’t go into overdraft\u2014what will happen? Your overdraft will pop up and appear again. <\/p>\n
You told yourself “this time I’ll really be on top of it.” But you didn’t get professional help, didn’t set yourself up with tools to track expenses, and didn’t agree to lower your standard of living\u2014chances are you’re boarding a one-way train to financial ruin.<\/span> <\/p>\n Don’t rely on the bank to offer you good solutions to get out of overdraft. What else should you watch out for? Keep reading <\/p>\n You didn’t do the calculation that the bank deliberately doesn’t want you to do: the bank talked to you in terms of ‘prime plus’ and the plus is always a small number that doesn’t sound threatening. For example\u2014a loan of 60,000 NIS for five years at ‘prime plus 4.’ The important question is: how much did this loan actually cost you in shekels? <\/p>\n Here’s how to calculate: You didn’t negotiate, didn’t compare prices, and didn’t check suppliers: Here are some places worth checking before taking a loan: a loan against your provident fund, a loan from your workplace, and if you’re really in trouble\u2014Ogen Association.<\/p>\n The time to negotiate loan terms is before you take it! Think of it this way: <\/p>\n You’re about to take a loan\u2014this is a major financial decision that can also have long-term implications for your life. Slow down! Check several options. Even when you’re under financial pressure, it’s still your finances. Don’t let banks lead you to decisions that aren’t good for you. You have plenty of room to maneuver if you take the time to find solutions. <\/p>\n","protected":false},"excerpt":{"rendered":" Four Common Mistakes and How to Avoid Them<\/p>\n","protected":false},"author":2,"featured_media":1147,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[35],"tags":[],"class_list":["post-1148","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-close-debts-and-overdrafts"],"acf":[],"_links":{"self":[{"href":"https:\/\/neta.ussl.app\/en\/wp-json\/wp\/v2\/posts\/1148","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/neta.ussl.app\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/neta.ussl.app\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/neta.ussl.app\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/neta.ussl.app\/en\/wp-json\/wp\/v2\/comments?post=1148"}],"version-history":[{"count":0,"href":"https:\/\/neta.ussl.app\/en\/wp-json\/wp\/v2\/posts\/1148\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/neta.ussl.app\/en\/wp-json\/wp\/v2\/media\/1147"}],"wp:attachment":[{"href":"https:\/\/neta.ussl.app\/en\/wp-json\/wp\/v2\/media?parent=1148"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/neta.ussl.app\/en\/wp-json\/wp\/v2\/categories?post=1148"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/neta.ussl.app\/en\/wp-json\/wp\/v2\/tags?post=1148"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nWhat’s the principle here?<\/strong><\/h2>\n
\nTake a moment to understand what loan would be the right solution for you,
\nand add the loan repayment as a line item in your monthly expense sheet to make sure you can handle it.<\/p>\n
\nMistake #3: You Didn’t Check the Total Repayment Amount<\/strong><\/h2>\n
\nTake the monthly repayment and multiply it by the number of months in the loan period. Then subtract the amount you borrowed: in this case, a repayment of 1,278 times 60 monthly payments equals 76,680.
\nThe difference between the total repayments and 60,000 (the amount you took) is 16,680. In short\u2014a very expensive decision. <\/p>\nMistake #4: You Didn’t Use Your Bargaining Power<\/strong><\/h2>\n
\nYour bank is the first to offer you a loan. Think they’ll necessarily offer you the best deal for you? No and no<\/span>. <\/p>\n
\nYou’re going shopping\u2014compare possible loans like you would compare phone models before buying (between us, this is a much bigger financial decision). You could buy three phones with the money you’d save between a bad offer and a good offer. <\/p>\n
\nStep by step<\/strong><\/h2>\n
\n
\nWhat should you do?<\/strong><\/h2>\n