Asteria Lending Inc. 14th Floor, World Center Building, 330 Sen Gil Puyat Ave, Makati, Philippines
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As the economy continues to spiral across the globe, many people will now be looking for ways to adapt to their new lifestyle. Unfortunately, the economic damage caused by Covid 19 will not be easy to recover from and it will take a concerted effort on the part of both industry leaders and governments to make sure life can slowly return to normal. For borrowers, this is a particularly uncertain time and it is important to consider every financial decision you make very carefully if you want to avoid creating problems for yourself. To help you make sense of it all, here’s Asteria’s Recession Survival Tips for Borrowers.
Though credit is there to be used and to prevent you from being unable to pay basic living costs, it can be awfully expensive when taken out on an unsecured, short term basis. If you are amongst the millions of people who have been unfortunate enough to lose their job or be made redundant, you may feel as if this type of personal loan is the only option for you. Always explore other avenues such as temporary or part time work on a short-term basis or selling all of your unwanted household items. This means that if you do need to take out a salary loan to survive, you can do so knowing that you have exhausted all of your other potential options.
Covid 19 has changed everything and the global climate is totally different to anything we have ever experienced in peace time. People are starting to understand the need for compassion and understanding far outweighs the need to keep pushing the consumerist narrative. Though we will always need to buy products and pay for services, many people have become accustomed to a decedent lifestyle that is unlikely to be sustainable during times of global economic uncertainty. Focusing on what really matters to you, whether this is family life, health or your own sense of wellbeing will help you to prioritise clearly. Though it is nice to have all the latest technology and fashions, it is definitely not something most people would call an essential part of life.
Micropayments, direct debits, and subscription-based payments mean that as a society, we have become accustomed to spending more and more. During a recession, this level of economic activity will be difficult to sustain for most people which means that cutbacks and economising will be essential. If you do choose to borrow in order to make a large purchase, always focus on the quality of your investment, rather than allowing yourself to succumb to marketing hype and make lots of impulse transactions. Things like new TVs, laptops, kitchen units or vehicles are things that you will use for several years to come, so take the time to research and compare prices properly before you decide to part with your cash. You may need to make a few sacrifices and go without certain things, but you will thank yourself for focusing on quality rather quantity when your purchase is still working properly years later.
Just like the governments and health agencies around the world, individuals are going to need to adopt an approach that incorporates constant reviews and appraisals when it comes to their personal finances. You will need to look at what can be cut from your lifestyle without causing too much of a problem and you may also need to increase spending in particular areas. (Things like heating, utility bills and food may go up if you are working at home, for example.) This is good practice anyway but having a spending dairy allows you to analyse your own financial behaviour and identify any areas of concern. In a recession, you need to try and make every penny count, especially if you are providing for a family or caring for loved ones.
At this point in time, many people are going to need to take out personal loans or salary loans to survive, however, this doesn’t mean that you should feel pressured in to accepting the first reasonable offer you may get. Lenders are in competition with each other and in order to generate a good customer base, they need to offer something of value. This could be an excellent introductory rate, a flexible approach to early repayments or exemplary customer service. Do not be afraid to ask questions and to challenge anything that you think is unfair or potentially illegal. All legitimate lenders will employ staff that are confident and knowledgeable enough to explain their policies and procedures clearly and without making you feel pressured.
If you are paying off a high interest loan or credit card but feel as if you still need to borrow more, our advice would be to delay this if you possibly can, at least until you’ve paid off a sizable chunk of your existing credit. Once you have paid off your highest interest debt, you can use the extra cash you have to help you budget. You may also find that doing this raises your credit score quite significantly, meaning that you are more likely to be approved for a lower cost loan when you do need to apply for one.
During a recession, lifestyles and mindsets begin to change and this will be reflected in your spending and borrowing habits. Though you may still be coming to terms with the potential impact of the global situation, its essential to start thinking about how you can save money and borrow in a way that lets you get the most out of any agreement you sign up to. Thinking about what is really essential and what is an expendable luxury is also important. Prioritising essentials and even making sure you have a little bit saved up in case of an emergency will help you to survive this situation whereas reckless, self-indulgent spending will definitely not. Everybody is in this together and though financial situations will vary considerably, understanding that this is a situation that will potentially change the world forever will help you to come to terms with why you need to make such significant changes to the way you use your money.