Becoming fiscally responsible goes beyond knowing how to set up a budget and shopping the supermarket sales to save money. It’s also about knowing when you should ask for help and how to make those decisions with intent.
Borrowing money is a shared resource that consumers will take advantage of when they’re struggling with short-term cash flow or need help consolidating their debts. That being said, it’s important to tread cautiously when it comes to borrowing from alternative lenders to avoid becoming too complacent with their convenience and efficient withdrawals. While it’s a helpful tool for many Canadians, it’s important to remain aware of your limits — just as you would with other financial matters, including purchasing a home or paying for your education.
If you’re looking to borrow money, keep these tips in mind to ensure you make the right choice.
Know How Much You Can Afford to Borrow
As a borrower, you should take in the factors that will determine how much you can afford to borrow. This is particularly important for Canadians looking to secure payday loans in Calgary or higher-priced metropolitan cities. The costs are often higher than smaller communities — it’s easier to convince yourself you need more money than you may need to get through your financial hurdle.
The simplest way to know how much you can realistically afford to borrow is to comb over your current budget and identify the areas that require financial help. Stick to those areas of your budget and avoid asking for more as a precaution.
Make Timely Payments
Once you’ve received your short-term funds, there is an agreement between you and your lender that you will make certain payments to pay back what you’ve borrowed eventually. These payday loans payments must be made on time. Otherwise, you risk procuring interest, making it more challenging to pay back the money they’ve given.
These payments should be incorporated into your monthly budget, so you can ensure you’re able to make these payments while simultaneously covering your essential expenses. Consistently making payments is an integral part of a robust financial foundation — it sets the groundwork for smart spending and saving decisions going forward. Additionally, if you can show that you can make your payments on time, it can benefit your overall credit score.
Research Multiple Lenders
Before you decide to borrow, ensure you’ve done your research. The lending market is more competitive than ever, and there are multiple options available — so it’s important to know which option fits your current situation.
Traditional lenders operate with a more exclusive borrowing clientele — often accepting clients with higher credit scores and a history of low-risk financial decisions. This option is notorious for long wait times and excessive paperwork, which can be unrealistic for many Canadians, particularly entrepreneurs or struggling families looking to consolidate their debts.
On the other side of the equation are alternative lenders, which have become a popular choice for flexibility and convenient borrowing options. Their typically higher approval rates allow borrowers to access the money they need without the stress of paperwork and interviews, which means they can immediately remedy their financial challenges.
Whether you’re selecting a traditional or alternative lender, research is key. The goal is to ensure you’re making the most intelligent borrowing decision for yourself and your family.