How to Successfully Use Your Foreigner Loan
So you have applied for your foreigner loan and after submitting all supporting documentation, you have been approved after signing the loan agreement. What now? Should you do the happy dance and take the next flight to happy-land? We don’t think so, unless of course that’s why you were taking out the loan in the first place, which is not a good idea.
How you use your loan is going to be very crucial, because at the end of the day, you’ll have to make repayments for it. Being in a foreign country in particular, you won’t want to be known as that person who takes out loans for frivolous reasons and isn’t able to pay back, right?
Below we offer some standard pointers for foreigners, and anyone else really, to ensure your loan doesn’t turn into the worst mistake of your life.
Take only what you need
Doesn’t matter if your pay can finance it, doesn’t matter if you really want to, only borrow what you need. A loan must be repaid and it is repaid with interest. Therefore, if it isn’t any urgent matter, maybe just save up for a couple of months. If it is, take the exact amount that you need. Since emergencies cannot be planned for, you want to keep you expenditure as lean as you can, you could take out a loan for some non-urgent matter, only to have an emergency the following month that you now don’t have the ability to handle owing to the other loan you didn’t need and are servicing.
Short term cash flow, not long term investment
Refrain from using foreigner loan amounts on long term investment projects or equity and forex trading or gambles. Basically, if you might lose it, do not spend it there. Such loans are useful for temporary cash flow issues and emergencies only.
Religiously abide by your repayment schedule
You could put a reminder on your phone or PDA or calendar, just as long as you keep to your deadlines. Late payments attract penalties and you don’t want that. You want to be done with repaying the loan as fast as possible so that you can go on to deal with other matters and projects. Monitor your income and expenses carefully to ensure that you have the funds for your installments as they fall due.
Keep your documents safely
From your Note of Contract to receipts and any correspondence that you have with your lender, have a safe place where you keep all paperwork. You might need to refer to them in the course of the repayment period and eventually to close your accounts once the debt is settled.