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Be a Wise Newbie Borrower

July 18th, 2022

When you’re in middle school, your earning potential is pretty low. You’re too young for a part-time job but too old for a lemonade stand. So, saving money for big-ticket purchases is going to take some time. This is why you should consider borrowing. Ask your parents to loan you the money for the item you want to buy. If they agree, draw up a detailed payment plan which states how much you will pay them week or month until the loan is paid off.

It’s important to build a good reputation for paying back money you borrow. You can do that by sticking to your payment plan and creating a backup plan just in case you fall behind on payments. This way your parents will be more likely to lend you money in the future. It’s also good practice for when you get older.

Borrowing doesn’t change too much when you’re an adult—there are just more elements involved. After you turn 18, you can borrow money from your credit union. Here’s how it works:

  • You can fill out a loan application on your own. You’ll provide your account and income information and the reason you are applying for a loan.
  • The credit union loan officer looks at your credit report, any debt you already have, your income, and your other expenses. This helps the credit union lender decide if you are a good candidate for a loan.
  • Based on what he or she finds, the credit union lender will tell you if they will give you a loan. If you do qualify, they will ask you to sign a payment agreement that states how much they will lend to you and how much you must pay back each month.

Borrowing and paying back according to plan is easier than you think. Once you’ve found someone to borrow from and you’ve created your payment plan, guess what? That gaming console you have been wanting forever is within your reach! You just have to make sure you pay each monthly or weekly payment on time until the loan is completely paid off.