If the lending company cannot collect the loan, which might be warranted or unwarranted, the person who requested the loan should assume the consequences. To stop paying for a loan is a very serious matter that may affect your credit score, resulting in your inability to obtain news loans; and in more serious cases, you could get caught up in a legal action.

Make a realistic budget, and stick to it! 

That is why the first step to use credit wisely is to calculate how much credit you can allow yourself to use. You need to observe your current and future financial situation carefully and responsibly before acquiring new debt. As part of this analysis, you should assess your debit rate and establish a realistic budget to pay out your debt.

Debt Rate

Debt rate is the amount you owe compared to the amount you earn. It provides a clear image of your financial situation. The lower your debt rate is the greater amount of money available to save and spend on other things.
Your debt rate is the percentage of your net that will be used to pay debt and monthly bills. Here is how you calculate it: divide the amount necessary to pay your monthly bills and debt (including your rent or mortgage) by your net earnings (your earnings after taxes and insurance deductions).
Experts say you shouldn’t use more than 15 to 20% of your net monthly earnings (excluding rent or mortgage) to pay bills and loans. Therefore, only a maximum of 40% of your net monthly earnings should be used to pay for all your expenses, including your mortgage.