This way, you will take out a loan responsibly and repay easily

What is the family cash flow? How do you decide the amount of your refund? Why is it important to carefully consider the nature of the loan? Loan Planning Planning Guide

Taking out a loan is sometimes an essential necessity to deal with a deficit or to finance an exceptional event whose fixed income is insufficient. In the present age it is easy to take out a loan, so the question that must be asked is whether it will also be easy to repay it. No matter if it is a housing loan (mortgage), a renovation loan, or a minus closing loan - a loan should be taken for granted, because if you take out a loan without checking all the data and numbers, the loan may give you short-term oxygen but put you in the long-term distress.

Before taking out the loan, it is important to carefully consider the amount of loan you intend to apply for. On the one hand, the heart's inclination is to borrow as low as possible, but on the other hand, keep in mind that if the loan amount is insufficient to finance the needs for which the loan was taken - the problem can be solved.

It is also important to choose right from whom we take out a loan and to what extent this debt will burden our current conduct. It has long been the days when the bank was our only address, and it is now possible to quickly and easily obtain loans from a variety of entities. But, not all of these bodies enjoy the same level of credibility. The most natural alternative to taking a loan from the bank is a loan from a credit company - so the loan does not affect our credit line, and you can sleep quietly with the knowledge that the loan was given by a regulated body.

(Illustration: ShutterStock)

Spouses take out bank loan (Photo: ShutterStock)

Evaluation of refundability

A critical consideration when making a loan decision is the ability to pay back. To estimate how much you can repay each month, consider some data:

1. Your current income from work.

2. Your future income. For example, is an increase in wages or, alternatively, a work stoppage expected?

3. Additional Income - For example, are you expected to be released from a continuing education fund or are you supposed to receive a large inheritance?

4. Additional loans that you are already repaying, and their expected repayment date.

5. Is the family expected to grow, and as a result, family expenses?

6. Is it possible to reduce expenses to increase repayment capacity?

The family cash flow

To get an accurate snapshot, one must understand what the family cash flow is. Often, we seem to know what our revenue is and what the expenses are, but in practice we may actually estimate the revenue, but the expenses are much more complex and deceptive - there are fixed expenses, which we spend every week (like food), or every month like bills. , And there are occasional expenses like gifts, home repairs and vacations. So, to properly estimate your spending and revenue and understand what our cash flow is, we need to rely on full-year data.

This is not an easy task, but it is essential. To get the most accurate snapshot of expenses, all accounts (such as electricity, property taxes, water and gas), all insurance (such as auto insurance, apartment, and health) must be collected, current account pages, and all corporate account pages. Credit, and enter all of this information into the Excel table, also include expenses that are sometimes more transparent - from home or class commissions through event gifts, and note that the expense section should include all your expenses. And a visit to the barbershop.

The general rule of thumb for family economics consultants and domain experts is that a loan repayment is about 30% -20% of net wages (illustration: ShutterStock)

Accountant (Photo: ShutterStock)

To get an accurate snapshot of your income, you must enter your payroll information and any other money that comes in - from Social Security child allowance to income from rent if any.

The general rule of thumb for family economics consultants and domain experts is that a loan repayment is about 30% -20% of the net salary, which is of course in line with the other data mentioned above. The recommendation is to choose a conservative assessment.

After making the decision to take out a loan and test your repayment ability, the nature of the loan should be carefully considered - whether it is index-linked, whether at a fixed interest rate, whether the repayment will be for long periods in small amounts - or, conversely, for a short period with large amounts.

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