Responsible borrowing is a practices where you need to evaluate your chances of being able to repay your debt in time and according to those chances take on smaller or larger debt. When you are planning to take out a loan then you should compare various lenders, get the smallest annual percentage rate as well as choose the lender that most suits your needs and requirements. You also need to calculate various scenarios and how you would be able to repay your loans if, for example, you lost your job or had some other money problems. And only after all these calculations and careful evaluation of your financial health you should take out a loan that you can certainly repay.


In most cases consumers are not able to do all these calculations or they simply don’t want to do them because it take a lot of mental energy and it is much easier to listen to all those commercials and take out loans even if you don’t know how to repay them. When you take out an online loan or a credit line then you feel invincible and like you would never run out of money. And while that money lasts you certainly are not thinking about the consequences of your actions. But when that borrowed money ends then you will have to face the ugly truth that now you have to repay that debt. And usually people swear to themselves that they will never use loans again but as soon as the previous debt is settled they take out new loans either buying new cars, house appliances or simply using that money for fun. In most cases people can’t resist the temptation to get money today and think about repaying it later. But that thinking of “live today and worry later” can quickly escalate to a financial situation that is out of your control and where you have no other choice than tho declare bankruptcy.

When you think rationally and use your pre-frontal cortex then you can stop yourself from doing a big mistake that you will later regret. But it can be hard to do this in all circumstances and sooner or later most of us break our promises and do something impulsive. And if that impulsive ting is to take out a loan then you will have to face those consequences by paying back all that money.