Taking a personal loan to finance an investment or an emergency is an issue that most of us face. However, your financial health and money management skills will determine whether this loan will take you to another level or set you several steps back. The most ideal situation if happen to get a loan, is to buy assets that can improve cash flow and boost your wealth accumulation goals. Nonetheless, the prevailing challenging economic environment is increasingly forcing people to borrow for consumption. Then damage your financial health by putting it on a drip. Worse still, some are living beyond their means. To keep up with their lavish spending, loans are the available option to plug the finance deficit. In this case, it is important to note that a couple of banks have revised their tariffs upwards. This is in addition to the fact that the personal loan category usually fetches a high interest rate compared to other forms of financing because it is unsecured. It is, therefore, prudent to ask your banker if there are some tariff changes, and also find out the implications on the cost of their products and services. Banks usually push their loan products aggressively with colorful marketing language. They will tell you to take advantage of their low-interest rates to finance education, land or even furniture. However, you should not borrow simply because the money is available. The decision to borrow should be hinged on your financial health and your ability to re-finance that loan. This money comes at a cost, if you do not plan carefully, it may set you back financially. As a rule, you have to pay attention to the cost of borrowing that usually entails interest rate and additional charges. If possible, negotiate for a low-cost loan to avoid repayment pressure. Besides, this will make the loan more affordable. Your banker will probably tell you that interest payment is a function of the rate charged depending on the method of interest calculation. Normally, banks calculate interest on a reducing balance basis. Remember that all the other fees are usually charged upfront, meaning that the amount received would be less by those costs. When you ask for say, a sh5m loan, do not be surprised that the money deposited on your account is less than the amount applied for. But ensure that it is less by the fees deducted. Given this scenario, you can then assess how suitable this repayment period is to your cash flow. Another crucial aspect to consider is what you can forgo to meet the repayments over the period of the loan. In cases where loans are acquired as emergency funding, you may not be in the right frame of mind to go over the fine print in the loan agreement to know what you are signing up for. People in such situations normally just want to sign the forms, asking when the money would be deposited on their accounts. It is only when they face challenges in meeting the loan repayments that the loan cost becomes an issue. Another important aspect to look out for is the repayment period. Depending on the type of income earned, repayment staggered over a long period of time ensures that your household can manage the payments with limited strain on the finances. Some of the important things to remember when it comes to the loan agreement are the installment amount, flexibility in repayment schedule, the loan amount, interest rate and method of calculation and the different terms and conditions stipulated. If you do not understand the loan agreement, you have a right to request for more explanation. In the end, your decision to take a loan should be made after careful evaluation of the reason for borrowing and your level of financial health.