 TITLE: What Should I Know Before I Borrow Money? CONTENT: Why Borrowing Money Is Risky\n----------------------------\nThe positives of borrowing money are clear in certain instances: It may allow you to attend the college of your dreams or help you buy your first home, for example. But having a new debt you need to make payments on can also create extra financial risk. Here are some of the dangers tied to borrowing money:\n*   **Damaging your credit**: Whether you have a loan or a credit card, making late payments or missing payments can cause your credit score to fall. This matters because your credit is considered nearly anytime you apply for a new loan or credit card, and could be considered when you apply for a rental property, utilities and even a new job.\n*   **Extra costs**: If you use your credit card but don't pay off the balance every month, you'll pay interest on the charges—which could add up to thousands of dollars over time if you're not careful. You could also incur other costs such as late fees if you're late on a payment. These may be small, such as $25 for a late credit card payment, but these penalties can add up.\n*   **Taking on too much debt**: It's easy to get in over your head with debt, whether it's from running up credit card balances or trying to manage several loans at once, such as a student loan, car loan and mortgage. If your income can't cover both your debt payments and ongoing expenses, you may get trapped in a cycle of debt.\n*   **Going into collections**: If a debt goes unpaid for a long stretch, it may go into default and then into collections. Not only does this process further damage your credit, but it can be immensely stressful dealing with debt collectors and trying to figure out a path forward.\n*   **Losing your collateral**: With secured loans, you run the added risk of losing your collateral, such as a car or home. This isn't the case with unsecured loans, such as a personal loan or student loan, since there's no tangible object a lender can repossess from you.\n*   **Wage garnishment or bankruptcy**: Regardless of whether your debt is secured or unsecured, in the worst-case scenarios, consistent failure to pay could lead to the lender securing wage garnishment against you. Or, you may have no other choice but to declare bankruptcy, which causes lasting damage to your credit. These serious consequences can make it very difficult to get back on track with your financial goals. END