3. You Make Unrealistic Budgets

If you’ve never before accounted for all your income and expenses, you need to start doing that immediately. Taking on such a big responsibility is no joke, so you need to know how much money you actually have. The money you actually save at the end of each month after all of your expenses is how much you can afford to pay for a loan.

One of the biggest mistakes people make, especially those who are young and inexperienced in budgeting, is being too unrealistic about this. For e.g. you cannot expect to pay 90% of your income as loan payment in an attempt to get the shortest payback period; that’s just not realistic!