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How big does the loan need to be?

 

When deciding on the size of a loan, you should first consider the size of your monthly instalments, as that is the best indicator of your ability to pay. When discussing with a bank adviser, ask him or her to calculate the monthly instalment.

If you can afford to pay the instalments on top of your ordinary expenses, then you can continue to think about applying for the loan. But if you cannot afford the instalments, then you should reconsider your application, and instead look for other ways to finance your needs. For example, you might be able to finance the purchase out of your regular monthly income, especially if you withdraw some of your savings.

Always ask yourself: Do I really need the product I want to buy with this loan? Do I really need a loan in order to buy it?