Roughly every third citizen of the Czech Republic is in danger. This statement came from the Banking Association at the beginning of this year. The largest package of loans swallows mortgages, followed by leases and classic consumer loans. We rent for new housing, its equipment, purchase a new car, study, but we also do not hesitate to borrow on the latest electronics, holidays or even pets with a family tree.
Payday Loan as a Road to Hell?
However, not every consumer is able to objectively evaluate his options and take out a payday loan that does not negatively affect his standard of living. Unfortunately, many people get into a situation where one loan is paid out by a second loan. Without any hope, they find themselves inside a dangerous merry-go-round from which it’s not easy to get out. Usually it starts with a smaller loan before paying to help bridge the individual’s unfavorable financial situation. But the next month, the money is missing again, so the consumer can reach a riskier loan without a register. Subsequently, the bank will be exchanged for a non-bank company, and if it successfully ignores the call to pay another installment or debt, it does not have much to visit the executor.
What to do in a difficult financial situation
To avoid unpleasant financial distress, you need to prevent it from happening. The most important and crucial step is the responsible management of the domestic budget. Record both regular and occasional earnings and expenses and make a small assessment at the end of each month. Find out what you spend too much on and, on the contrary, save on. Plan ahead and create reserves in particular. You should save at least 25% of your monthly income sideways. This money will come in handy when your washing machine, refrigerator, or other completely indispensable household equipment leaves unexpectedly.
Credit yes, but…
If you do not avoid the loan, you need to select it accordingly. Do not bet on the first product that comes under your hand. Better compare each of them with each other. You should also be interested not only in the value of interest, but especially in the amount of APR. Also check your due dates, browse through forums and discussions and click through the creditors. If the situation allows you, avoid lending to risky clients, such as a loan without a register or a loan without proof of income. The risk that the company is lending to is because it has to be reflected somewhere. Most often it is the amount of interest.
Have you overgrown your loans over your head?
Do not put your head in the sand and actively address this unpleasant situation. You should also contact the lender immediately and fix it with the current situation. You can arrange to postpone installments or installment holidays. If the situation is really unbearable, check out the options for refinancing or consolidating loans. The last station is the declaration of a personal bankruptcy, but a request is required that must be approved by the competent court.