No one likes dealing with an unexpected expense, especially when your funds are already low. Maybe your hot water system breaks, or your trusty old car has finally hit its limit...
A personal loan can help cover costs in the short term, but before you rush in, do a little planning to make sure you’re prepared.
Borrow only what you need
An easy mistake to make when considering a personal loan is taking out more than you need. It might seem like an attractive idea at the time, but borrowing more money than you need only means paying back more money than you need. In the long run, you might regret taking out a loan that takes months or years longer to repay.
Make a budget
One of the most important things you can do when taking out a personal loan is creating a budget
that factors in the repayments of your loan. Loan repayments might be an entirely new addition to your fortnightly or monthly expenses, so don’t forget to add them into your budgeting plans.
Make extra repayments
You might already be overwhelmed with your regular repayments, and making extra ones can sound crazy. But if you have the capacity, making additional repayments will pay your loan off sooner and save you money down the road.
Start an emergency fund
Maybe an unexpected expense has already hit you, and there’s not much you can do about it now. But starting an emergency fund is a great idea for preventing the panic and stress if (or when) another unexpected expense occurs. Set yourself a specific amount to put into a separate savings account
each month until you’ve built a fund that would cover any number of unexpected expenses. There are also many insurance products available to also check you have adequate insurance
Consider income protection
Your income is your livelihood, so it can be a good idea to protect it. Income protection
will help you keep up with your bills and expenses if you’re unable to work because of illness or accident. That could mean the difference between falling behind on bills and simply focusing on getting back to work.
Unexpected expenses are just that—unexpected. But don’t panic just yet, get in touch
and we can help with a range of financial needs, from personal loans to income protection and more.