We have all sometimes found ourselves in a situation where we lack the necessary finances to realize our dreams. At such moments, a loan is usually offered as the fastest and most affordable solution. Although it can help you move a little further in life, it can also pull you straight into the hot hell. Whether it is the right solution for you or not depends on what is its purpose. So when does a loan really pay off and when should you forget it?
Loan as best friend
Nowadays, few people can save several million to build or buy their own home, so it goes without saying that you can rely on a mortgage loan at such times . In addition, the value of apartments and houses has been increasing over the years, so you may even sell them back in a few years and earn some money. Similarly, with the necessary refurbishment or a new car you need to get to work every day.
The loan can also serve you well if you are considering studying or other forms of education that will provide you with a better job in the future and thus a higher salary. The same applies to other situations where you have the opportunity to improve your living conditions in the long term . But beware of business! While your intention may be good and original, the security of the loan is almost zero in such situations.
A quick online loan could also be a good solution if you need medical treatment and cannot afford it. A short-term illness could turn into a bed for several weeks without proper treatment, preventing you from going to work and thus fulfilling your existing obligations. However, keep in mind that it is better to first ask the family and loved ones who will not ask for a minimum or a minimum fee for the loan.
When do you prefer to save?
As a general rule, if the loan repayment period is longer than the lifetime of what you want to borrow, you should put your hands away from it. In addition, the loan should only address situations where debt is inevitable. Therefore, you should consider it only when your basic necessities are at stake – for example, when it comes to energy arrears or a broken refrigerator. On the contrary, things like bicycles, consumer electronics, Christmas gifts or a luxury holiday in the tropics are definitely safer to save.
Whether your loan is on the spot or not, be sure to check out some loan comparisons in advance to make sure you don’t sign a contract and then find that you couldn’t get a much better deal. Also, write down your monthly earnings and expenses to make sure your payment schedule suits you. And if you have several loans on your neck now, consider refinancing or consolidating them.