Go to a bank for a personal loan for plastic surgery, exceeding a credit card to buy Christmas presents, and the loan from a 401k retirement plan are some of the silly ways people borrow money. There is also using a home equity loan to pay for a vacation, but that stupidity has been covered so often during the recession that is old news.
Credit Card Law which was enacted last month makes a credit card has a transparent operation that is supposed to protect consumers in credit card companies – despite the increasing rates – but not consumers protect themselves and foolish spending habits.
Here are some of the stupidest reasons to get a loan :
1. Buy a timeshare.
One thing is if you have $ 15,000 in cash burning a hole in your pocket and you want to throw it away on a vacation home time share, and can still pay the monthly maintenance costs. But for the money borrowed and pay interest on something that is likely to turn upside down and is worth less than you paid is a bad idea. They are bad investments that sellers are practically giving away, and borrow money to buy one are throwing money away.
2. Payday loans.
It is common to run out of money at the end of the month, but the payday lenders are sharks to avoid at all costs. It is better to have a low interest card, low credit limit and pay in full each month for these expenses last hour while waiting for a paycheck.
Rates payday loans are usually a percentage of the amount borrowed or point for every $ 100 borrowed, according to a story GenXFinance. Additional fees are heaped in rolling over the loan. Most lenders will not quote the exact rates of interest, ranging from 390% to 900% APR. A fee of $ 45 in a $ 300 loan amounts to 15% for two weeks, or about 30% per month, and 390% for one year. If things are so tight that you have to have a payday loan, ask your creditors for more time to pay your bills.
3. Plastic surgery.
Unless you have a job lined up that will increase revenue for the improvements through plastic surgery, is likely to regret a loan for it. At least you do if you are the lender, as one man learned to “Judge Judy” when he took woman money for her to have her breasts enlarged.
One of the reasons cited for obtaining casino credits is that if the casino is in a bad neighborhood, who do not like traveling with large sums of money in my pocket and it is better to borrow the money from the casino to play and pay again in a week if less than $ 1.000. If more, you will have 14 days to return the money, up to 45 days for $ 5,000 or more. But beware: Casinos will automatically take the money due from your checking account if you do not send the full amount of the due date.
There are also ATMs in casinos, but the high fees will not leave you as much money to play. Fill a casino credit application is the presentation of a credit card, although the casino requires the amount of money you are borrowing to be in a bank account that can bind. If you cannot control you are playing, this is getting a bad loan.
5. 401 (k) loan.
Unless you are retiring, borrowing money from a retirement plan 401 (k) before age 59 1 / 2 will bring some heavy charges to federal taxes as a way to discourage people to use the money for anything other than retirement. There are 401 (k) loans and debit cards are not associated with accounts.
The money from this retirement account is not taxed until withdrawn. There is a 10% early withdrawal penalty on top of being taxed on any amount that is extracted. Leave the 401 (k) has less money to invest and a great loss to compound interest, which could become a millionaire with more money than it saves time. Taxes and fines could put a new tax bracket and eat half of your money. According to the website itself, the dollar, leaving a job before paying in full a 401 (k) loan is expensive. Borrowers have 60 days to pay the entire loan before the IRS considers this a normal withdrawal and not a loan.
To get into debt so they could afford to host the party of a lifetime is a great way to start a marriage. Have a loan, whether for a wedding or any of the other ways described here, along with legitimate reasons, such as a mortgage, is something that will continue for years unless paid off quickly.
As a couple, you will be back before starting a new life together. The debt will affect all the decisions to make together. Will you be able to afford new furniture or domestic emergencies that will appear if you are paying a $ 30,000 loan with an album of photos and memories to prove it?
7. Helping a friend.
If you lend money to a friend, you might as well consider the money gone, and a gift. If you pay, consider yourself lucky to get the money and keep the bad blood spoiled a loan between friends can create.
There are so many things that can go wrong, especially if money is borrowed from a boyfriend or girlfriend. Without a written contract, you’re screwed. And if you have a contract to take out a loan for a car of another person, you are legally responsible for paying the money. And what rights you have to get that money after a breakup? You will need a lawyer, and do not expect it to be cheap.
As weddings, take out a loan to buy Christmas presents is a silly idea that does not need much explanation. Christmas loans are easily available with all types of businesses eager for money so it can be seen as a generous gift giver, whereas into debt and make your financial life a living hell.
Disappointed children on Christmas morning is something no one wants to do, but the loan is not the way to pay for the gifts. Take a look at your finances now and start keeping track of where your money goes. You may find, as a family, which $ 2.300 per month in expenses cannot be explained.
9. Buy a new car.
All these expenses would be easier if you put money aside in advance and not have to get a loan to pay. The same goes for a car loan again. Make a car payment for three or five years is painful not only the monthly interest on the loan, but for the monthly reminder that you are paying for something that is falling in value every time you use it.
Half car loan your car may depreciate by 20% -40%, making the car less valuable than the remainder of the loan. A new car smell is good, but not last as long as the loan payments. It is better to put money into a savings account each month, years before you have to buy a car.
10. Stock market.
Stock options are always a gamble, despite a better education than going to a casino. But to borrow money from a broker or bank to enter the stock market is a poor choice unless you have money to lose. Broker fees will eat into your profits, and buy in the credit spread through a broker is too risky. It is better to buy stocks slowly and only what you can afford – money that means they have at hand and not through a loan, but by buying directly through the company you want to invest in.