Many people are confused when they want to apply for a loan or when they’re looking for ways to finance something, either their new home, a new business or their kid’s college. Today we want to answer some of the most frequently asked questions about loans and financing.
1. Where should I look for a loan?
Ask your bank first. If you’re a loyal customer, you’ll probably get a good deal. You can also use the Internet to compare offers from several banks. There are some websites that aggregate data from several financial institutions. It’s one of the easiest ways to look for the best loans.
2. Why are loans bad?
Because they enslave you. People who are in debt don’t have the same freedom as debt-free people. Moreover, debts lead to sleepless nights and many other health problems (constant worrying isn’t good for your body).
3. How should I finance my new company?
Consider looking for an angel investor – an experienced businessman who will finance your business in exchange for a small part of your company (e.g. 20%). You can also consider crowdsourcing (if you have a really good idea) or if you’re confident that your business will bring profits in the first month, use your credit card. Last but not least, you can apply for a business loan. However, you should keep in mind that most financial institutions aren’t very eager to lend money to people who want to start a business (existing companies have a much higher chance of getting a loan).
4. How to get rid of debt?
Here are some of the most effective ways to get rid of debt:
- track your expenses meticulously
- get a second job
- sell things that you don’t need (including selling your home if you no longer can cover all expenses)
- stop applying for new loans
- live as frugally as possible