Making sure you keep up with repayments on finance

From time to time we all need to borrow money for something or another, whether it is in the form of a mortgage to get our own home, a car loan to buy a vehicle, or a credit card to provide ease and convenience on a day to day basis.

There are many different types of finance available to suit different needs and circumstances, with a wide variety of lenders from banks and building societies to online lenders offering finance to suit a wide range of purposes. This includes secured loans, unsecured loans, credit cards, personal loans, car loans, consolidation loans, mortgages, and more.

Being able to take out finance can prove invaluable when you really need to raise money for a particular purpose, and amongst the reasons why people take out finance are to improve their home, to pay off smaller debts, to pay for a holiday, to fund a wedding, to purchase a vehicle, and for a wide range of other purposes. No matter sort of finance you are taking out and no matter what reason your are taking out the finance for there is one thing that you have to remember, and this is the importance of repaying the finance responsibly.

By choosing finance that you can comfortably afford the monthly repayments on you should be able to make repayments responsibly. It is important that whatever type of finance you have you make repayments for at the least the amount requested and by the specified date each month. If you fail to pay the amount requested each month, default on repayments, or make regular late repayments you may find that the consequences have a significant impact on your future.

If you default or fail to make responsible and timely repayments on your borrowing you could suffer a number of consequences. If you do not keep up with repayments on your unsecured borrowing then you will find that your credit profile will get damaged, and the negative impact on your credit file will result in a difficult financial future where getting credit in the future could prove difficult or even impossible.

If you have a secured loan or secured finance then the need to keep up with repayments is even more important. This is because the consequences are even more dire. Secured finance is secured against an asset, and in most cases this asset is the home. If you do default on repayments with your secured finance you will not only be risking your credit profile but you will also be risking your home or any other asset against which the finance is secured.

It is important to remember that whilst being able to get finance can prove invaluable you, as the borrower, have certain responsibilities, and this includes making repayments for the right amount by the specified date and not missing repayments. If you do not feel that you can repay the finance responsibly you should reconsider taking out finance at all, as you could soon find yourself struggling to keep up with your debt repayments.

Tom Smith
28th February 2008

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