Responsible borrowing

Borrowing money responsibly simply means making sure you don’t borrow more money than you can afford to pay back. Since applications for borrowing  and missing repayments can affect your credit score, you should try to take the following steps to make sure your application is likely to be accepted and you are able to pay back the money owed.


Spending some time familiarising yourself with the different loans and rates available is a good idea. Choosing the lowest interest rate will help you to save money but there are other aspects of the loan to consider: for example, is the loan being calculated on a fixed or floating basis? Is it on a reducing balance or flat rate? Make sure that the loan you finally choose suits your situation.

You should also consider the duration of your loan. A longer term loan might appeal due to it resulting in a smaller repayment every month, but if you can comfortably pay a larger sum towards the loan without hurting your lifestyle and other financial commitments, then you might want to consider doing it. After all, a long repayment period might mean you pay less each month but it also means you will end up paying more interest.


Budgeting is extremely important when considering taking out a loan or another type of borrowing. Taking stock of your monthly outgoings will help you work out the amount you can afford to pay back each month, while a loans calculator could help you decide on the ideal payment term for your circumstances. You should also consider any changes in your situation that might occur during the repayment period and whether or not they will impact your finances.

What if I’m in danger of missing a payment?

If you’re having trouble repaying your loan, make sure to tell the provider as soon as possible and discuss the situation with them. They might be able to restructure your payments so that you can avoid falling behind.

By doing some research, budgeting, and spending carefully, you should be able to borrow in confidence knowing your financial obligations will be met.