Funding any project is no doubt important. It can be very trying for a lot of people, causing them sleepless nights as they think of how to balance all the bills and yet finance the project at hand. Raising funds to buy a property is no different. One has the option of coming up with the money himself/herself or, better yet, securing a loan. Loans need to be repaid over a period of time and this scares people. But a loan might be just what you need to leap unto the next level. Here are some things to consider before sourcing for a loan:
Can you pay back?
This should be the first question you ask yourself before securing a loan. You must be brutally honest when answering this question, because you might require collateral to secure the loan. Problems will inevitably arise if you can’t repay your debt. It will suffice to project, if you run a business, how much you could make after the loan has been secured and put to use. This should be based on concrete, empirical evidence if I may add. For the employed, how much do you earn? Can you pay in installments over a period of time and still live comfortably?
Read the terms very carefully
The loan giver most likely has a legal document containing terms of the loan. Read this carefully and make certain to fully understand the terms before securing a loan. Is the interest rate exorbitant? Or can you get something better from elsewhere?
What if the worst happens?
This seems rather pessimistic, but you have to consider all possibilities. If you can’t repay the debt and you lose something else you had chosen as collateral, can you recover? If you can’t, and you are a hundred percent sure you can’t, it might be wiser to leave out the loan. To protect your sanity, that is.
