It's a common saying that live within your means or don't spend what you don't have.
But today's philosophy is quite different. The idea of having to slog, save, suffer and sacrifice all your desires in the hope of being able to buy things or enjoy a trip "some day", is just not palatable to the young generation of today. They don't like idea of saving up money and dying rich so that their children can enjoy their hard-earned money. Today's mantra is not only enjoy all the money you have now, but also to enjoy today and pay tomorrow.
And this is where the finance companies come in. Financing is a huge industry today, especially in the USA. But this culture is fast catching on in even countries like India, whose people were, in the past,a conservative lot when it came to spending. Today one can finance practically every commodity that can be sold. From two-wheelers to expensive motor cars, from computers to homes, from education to holidays, everything can be financed. You just name it and there's a financier waiting for you right there.
But with so many choices, what does a person do when he needs to finance for something? Can he just blindly sign on the dotted line? The answer is a definite "No". All the financing companies, no matter how big, are essentially a business person. And much as they may want you to believe that their ultimate aim is to benefit you, one must not be fooled. They, like any other business person, are there for their own good.
So what must one do? Just keep your ears and eyes open and read the fine print. Here is a list of some of the things that a borrower must look out for before he enters into an agreement with any financier.
1. Look at the reputation of the financing company. Avoid fly-by-night operators. 2. Some companies secretly wish that you default on your payments so that, they can seize whatever you have financed. These companies usually include clauses that makes it possible for them to seize your asset at the drop of a hat! 3. Be clear about the rate of interest being charged. Compare it with the rates being charged by other companies on similar loans. 4. Find out if the interest quoted by them is on reducing balance method or flat on the opening balance. The latter turns out to be far too expensive. 5. Do not hesitate to ask the representative any & all questions. Clarify all your doubts. Ask embarrassing questions if you think they are necessary.
And above all:
6. Make sure the loan does not come at the cost of your peace of mind.
Tyson J Stevenson writes on a wide variety of "every day" subjects, most often with valuable news & reviews.