Before taking on debt.
WHAT TO ESTABLISH
Whether you need it Whether you can repay it What it costs in total What happens if circumstances change
WHY THE LAST QUESTION
Income falls, and obligations do not.
WHAT TO CALCULATE
The repayment as a proportion of your income.
WHAT TO CONSIDER
Whether you could still meet it if income reduced.
WHAT SOURCES EXIST
Banks and formal lenders Cooperatives and thrift groups Employers Family and friends Informal lenders Digital lending applications
WHAT TO ESTABLISH ABOUT ANY LENDER
That they are legitimate What they actually charge What the terms are, in writing What they require
WHAT TO BE CAUTIOUS OF WITH DIGITAL LENDERS
Rates far higher than they appear Very short terms Access to your contacts and phone Recovery methods involving your contacts
WHY THAT LAST POINT
Contacting family, employers and friends over a debt is a known practice and it causes serious harm.
WHAT TO CHECK BEFORE INSTALLING ANY LENDING APPLICATION
What access it requests.
WHAT TO REFUSE
Access to contacts, messages and photographs.
WHY
There is no lending reason for it.
WHAT TO ESTABLISH WITH FAMILY AND FRIENDS
The amount, the repayment, and the date, agreed clearly.
WHY
Undocumented lending between people destroys relationships.
WHAT TO PUT IN WRITING
Even informal arrangements.
WHAT TO AVOID
Guaranteeing someone else's debt Borrowing for someone else in your name Pledging essential assets
WHY GUARANTEES
You become liable for the whole, and people who ask frequently cannot pay.
