A guide to responsible borrowing

Whether you're considering a personal loan, an installment loan, or a short-term option, the same handful of habits tend to separate a borrowing decision that works out from one that creates new problems.

Before you apply

• Know the exact amount you need — and resist rounding up "just in case," since borrowing more increases both your payment and total cost.
• Check your own budget honestly — could you make the estimated payment even in a tighter-than-usual month?
• Compare at least one alternative — a payment plan, an assistance program, or a different loan type.

While reviewing an offer

• Read the complete agreement, not just the summary — including what happens if a payment is late.
• Confirm the APR and the total dollar amount you'll repay, not just the monthly payment.
• Verify the provider is licensed to operate in your state.
• Be cautious of any request for payment upfront before you receive funds — that's a common warning sign of a scam.

After you accept

• Set a reminder a few days before each payment is due.
• If your situation changes and a payment becomes difficult, contact the provider before the due date — many have hardship options, but they're easier to arrange proactively than after a missed payment.