Borrowing can be a good way to sort out your current financial problems. If you are having difficulties building a house, you can borrow a personal loan to enable you sort out such financial problems. On the other hand, you can also borrow funds for buying a car. Sometimes people borrow loans for settling outstanding debts. For example, you can borrow funds for settling an outstanding personal loan. People can borrow payday loans to settle any outstanding personal loans. But, you may not know how much you can borrow. In order to borrow as much as you can afford, you have to take into account the following factors.
Consider your actual monthly wage
This is one of the most important factors that are worth taking into account when borrowing a loan. Your monthly wage is the main determinant in as far as the actual amount of money that you can borrow is concerned. You may need a lot of money in the form of a loan. However, your actual wage will limit you. Your financial lender will take into account your actual monthly wage before lending you the funds. In particular, your lender will consider the actual difference between your monthly wage and the monthly debit for servicing the loan. If the difference is too large, you may not be granted a loan.
Is the loan insured or not?
If the loan is insured, you may need to pay extra funds to cover for the loan. Your financial lender will consider the total amount of money that is supposed to be channelled to settling the loan if the insurance has been incorporated. Most secured loans are insured to prevent the loss of funds in case of illness or loss of employment. However, you are at liberty to dismiss insurance if you are not in favour of the idea of associating your loan with a certain form of insurance.
How much do you need to pay your bills?
Your financial lender will need to know whether your current monthly wage is able to sustain your loan and your family after the appropriate deductions have been made. If your current wage cannot sustain the loan and your monthly bill, you may not be granted a loan.
How is your credit score?
Your financial lender will also take into account your credit score to know whether you are credit worthy or not. Depending on your current credit score, your lender will know whether to lend you a certain amount of money or not.