Pay attention, borrowing money costs money! If you are looking for a loan, you will find this statement everywhere, on websites, on the radio and in commercials on television.
Loan providers and credit providers are required to state this in order to inform the consumer that borrowing money involves costs. These costs are usually the interest that you paid during the term of the loan, or the service costs that you paid to make use of a loan.
Why the expression Borrowing money costs money?
As mentioned, the expression “Attention! Borrowing money costs money “intended to inform the consumer of the consequences of a loan.
Now it is not the case that borrowing money by definition has to be a burden, or an act that guarantees financial problems for you. However, it is true that many consumers take out a loan without taking into account the consequences that borrowing money could entail
When taking out a loan
You enter into a contract with a lender. This lends you an amount during a pre-agreed period that you must repay or repay within or within this agreed period.
This loan is provided to you with mutual approval, since you have applied for the loan yourself and you have agreed to the terms and conditions set by the loan provider.
However, in practice it often happens that consumers are seduced by a specific purchase and therefore take out a loan without having a good look at whether the loan still fits in with the financial picture in half a year, a year or longer.
The costs that this loan entails can actually be repaid
You must be sure that the costs that this loan entails can actually be repaid without bothering you. If this is the case, it obviously does not have to be a problem to take out a loan. If you are not sure that you can pay off the loan, then it is of course not advisable to take out a loan. Borrowing money costs money is therefore not for nothing created.