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| How much credit can you afford? |
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If the lender is unable to collect on a loan, whether secured or unsecured, there are consequences for the
borrower. Defaulting on a loan is a serious business, and can impact your credit rating, resulting in an inability
to take out new loans. In more serious cases, it may lead to legal action.
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That's why the first step in using credit wisely is figuring out how much credit you can afford to take on.
You need to take a long, hard look at your current and future financial situation before you take on any
new debt. As part of this analysis, you should look at your debt ratio and set a realistic budget for dent repayment.
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