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Habits of a Healthy Borrower

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Are you a borrower? Don't be hesitant. In one way or another, we are all borrowers. It is impossible to imagine existence without borrowing. No, we are not doubting your ability or self-sufficiency, but the unpredictability of life is such that no matter how prepared one is, something or other will always come up that will require reliance on others.

Generally, borrowing means getting something from someone with the intention of giving it back after a short time. In the financial world, this means getting money from someone with the intention of paying it back.

There are various kinds of borrowers, but there are only a few borrowers who can be classified as healthy. Healthy borrowers are what the world needs to keep the money cycle going and a healthy exchange going. Everyone loves healthy borrowers! So, we have created a check list for healthy borrowers. See for yourself if you belong here.

1. Timely Return

An obvious but important habit of healthy borrowers all across the globe is timely repayment.

2. Monitor their credit reports.

All successful borrowers monitor their credit reports. Do you know why? It is so because it helps them understand and plan for the future.

3. Repay previous debts before applying for a new one.

Do you know what makes a healthy borrower stand out from others? It's the habit of repaying old debts before applying for a new one! Whether you believe it or not, lenders place more trust in regular borrowers than in defaulters.

4. Do not wait for the last minute.

A healthy borrower does not live on the edges. Everything is done well and on time.

5. Reflect before closing accounts.

Never rush to close any credit account. Do you know that closing a credit account impacts your credit score? This can impact you if you intend to apply for a new loan in the future.

6. Maintain a healthy income-to-debt ratio.

Do you know that there are many debtors who struggle to maintain a healthy income-to-debt ratio? The easy availability of instant, unsecured loans appear to give immense freedom. Instead, they entangle the borrower in a manner that they find difficult to repay.

7. Track spending

Any responsible borrower will keep track of their spending because they know they must repay the amount spent. The responsible borrower knows how to spend wisely, and as one starts writing things down, it is easier for them to avoid unwanted expenditures in the future.

8. Save money for emergencies.

By this, we mean that the borrower does not exhaust all of their funds or use all of the credit that they obtained. Here, the borrower saves a sum to deal with emergencies.

The habits listed above are not exhaustive, but they are essential if we are to create 'a world of healthy borrowers!'

So, what do you think? Are you a healthy borrower?

P.S. Despite being a healthy borrower, if you are facing some issues, reach out to FREED!

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