🔎 Disclosure: WE DON’T SELL ANY COURSES. Money Vice is reader-supported. When you buy through our links, we may earn a commission at no extra cost to you. The ideas presented on this site are opinions and are presented for entertainment purposes only. We’re not licensed financial advisors. The information presented should not be construed as financial or legal advice. Always do your own due diligence.
1. Overlooking the Total Cost of Borrowing
You know what’s worse than taking a loan? Realizing later that you’ve been paying way more than you thought.
That “low monthly payment” looked cute until you noticed the interest quietly sipping your wallet dry.
You see, it’s not just the interest. It’s the sneaky fees, the insurance add-ons, and sometimes, the late payment traps waiting around the corner.
And when you finally do the math, you realize that a $10,000 loan somehow turned into $13,500.
You’d think we’d all check the numbers first, but most people just sign and pray.
👉 Here's How You'll Do It: Use a free loan calculator on sites like NerdWallet or Bankrate before signing anything to see exactly what you’ll owe in total.
📌 SAVE IT FOR LATER! 📌
2. Using Loans to Cover Daily Expenses
If you’re borrowing money to buy groceries, it’s time to take a deep breath.
Personal loans aren’t meant to fund your everyday life. They’re meant for big, one-time expenses that actually move you forward.
Using borrowed money to fill your gas tank or order takeout? That’s how debt sneaks up like a bad ex you didn’t block.
It feels harmless now, but when your paycheck hits and half of it goes to loan payments, reality hits back harder.
Instead of borrowing for everyday costs, tighten your budget and cut down unnecessary spending.
👉 Here's How You'll Do It: Try using Rocket Money to spot and cancel unwanted subscriptions that drain your cash before you even notice.
3. Spending the Loan Money on the Wrong Things
It’s wild how many people take out loans “for emergencies” and then end up buying a new iPhone.
Sure, it feels nice in the moment, but remember. You’re still paying interest on that instant gratification.
The loan should solve a problem, not create a new one wearing designer sneakers.
Every dollar borrowed has to earn its keep, or you’ll be stuck paying off stuff you barely use anymore.
Ask yourself, “Will this still matter when I finish paying for it?” If the answer’s no… you already know what to do.
👉 Here's How You'll Do It: Before spending any loan funds, write down your top three needs and stick to them using a simple budget app like Rocket Money to track where every dollar goes.
Bonus Tip: Keep Your Payoff Plan Simple
By now, you’ve seen how easy it is to dig yourself deeper with just one wrong move.
But here’s the thing. Staying on top of your loans doesn’t have to feel like juggling chainsaws.
You just need a system that tells you exactly what to pay next, how long it’ll take, and how much interest you’re saving.
That’s where tools like Undebt.it come in clutch. It’s a free debt payoff planner that helps you organize every loan, track progress, and actually see your debt shrink over time (which, FYI, feels incredibly satisfying).
👉 Here's How You'll Do It: Head to Undebt.it, plug in your loan details, and let it build a personalized plan showing exactly how fast you can be debt-free.
4. Taking Out a Bigger Loan Than You Need
Bigger isn’t always better. Especially when it comes to debt.
It’s easy to think, “Might as well take a little extra, just in case,” but that “little” becomes a lot when interest kicks in.
You might convince yourself you’ll use it wisely, but let’s be honest. Extra money tends to vanish faster than fries at 2 AM.
Borrowing more than you need is like ordering dessert when you’re already full. It just adds to the regret later.
Stick to what you actually need and leave your future self with fewer headaches.
👉 Here's How You'll Do It: Borrow only what you can clearly justify. Use a loan estimator from Experian to calculate your ideal loan amount before applying.
5. Applying to Too Many Lenders at Once
You know how people say “apply everywhere” to improve your chances? Yeah… don’t.
Each loan application hits your credit score like a mini jab, and too many in a row can make lenders nervous.
It looks desperate. Like you’re sprinting from one cash register to another with your card on fire.
Even worse, too many hard inquiries can cost you the best interest rates later.
Patience pays off. Shop smart, not fast.
👉 Here's How You'll Do It: Use comparison tools like LendingTree or Credit Karma to prequalify and check rates without hurting your credit score.
📌 SAVE IT FOR LATER! 📌
And that’s it!
Never forget it…
🍔 A Bigger Bank Account Is Waiting For You!
😉 Dale!
