Taking out a loan is no small undertaking. In fact, a loan is a very serious matter, one that warrants a great degree of research, forethought, and planning. If you take a loan out frivolously without the proper due diligence, you can find yourself in a rather uncomfortable position when bailiffs begin arriving at your home, demanding money, threatening to take you to court, and trying to force entry. Not only that, but you can also find yourself in grave trouble with the credit agency, which may issue a default that can affect your credit score for up to four years.

Yes, taking out a loan is a very serious thing. It is not something to be taken lightly. In this article, we are going to be telling you what you should keep in mind before getting a loan, as well as a few things to watch out for.

Here is what to keep in mind before taking out a loan.

Your Credit Score

Off the bat, the first thing you need to think about is your credit score. If you have a medium to low credit score range, you may be unable to take out a loan. Generally, you need quite a high credit score in order to get an unsecured loan. If you have a low credit score and very little chance at receiving a loan, applying is pointless; the company will issue a hard search on your credit report which will bring it down even lower, just to be denied and set yourself back.

What Do You Need It For?

Taking loans out for useless and pointless expenditures is not a habit you want to get into. If you can afford to repay the loans, we cannot tell you what to do with your money, but we can simply advise that it is too dangerous a game to play. Many people have foolishly taken out loans for unnecessary expenses, such as clothes, expensive meals, or hotels, thinking they can pay everything back, only to find out later down the line that they cannot, which leaves them in a very awkward, and uncomfortable financial situation.

How Do You Intend On Getting It?

There are a few different types of loans that you can get. You could get an unsecured loan or a payday loan as they are more commonly known, or you could get a secured loan. The latter of the two can be issued to anyone regardless of credit score, providing that they have a guarantor with a good credit score and who is a homeowner. The former is only issued to those with a good credit score.

Who Do You Intend On Getting It From?

There are many unscrupulous and untrustworthy loan providers, who have become known in the media as loan sharks. Loan sharks are dangerous people who will likely threaten you and resort to violence in order to get you to repay your loan if you can’t afford to. Be very careful about where you get your loan and ensure that they have the proper licenses and documentation to ensure that they are a trustworthy loan provider. Get your loan only from reliable and trustworthy sources – never from ‘private lenders’ for they are more often than not loan sharks.


Repaying your loan is of the utmost importance. If you cannot afford to repay your loan then you shouldn’t get a loan out, it is as simple as that. Get only loans you can afford to pay back – never if you cannot afford to. We have already explained what the consequences can be of getting a loan that you cannot afford to repay on your credit report. You will find yourself in a lot of trouble and will likely find your financial record marked for a number of years. Repaying your loan is very important, do not overlook this aspect of getting out a loan.


When taking out a loan, you always have alternative options, being that there are other ways that you can make money. You could, for example, pawn your belongings or sell some to get the money that you need. Alternatively, you could ask a relative for a private loan between you and them. Always seek out other options before getting a loan, for loans are very serious and should not be dealt with lightly. Research and establish if there are alternatives available to you before taking the most extreme option, which is, of course, a loan.

We hope that with this page, you now understand the severity of loans, as well as what to do before taking one out. Getting a loan can be a very good thing in some circumstances, and bad in others. Research and check beforehand. Thank you for reading.