Loans To Take Or Forsake

Loans: to​ Take Or Forsake?
Learn when to​ take up loans and when to​ forsake them.
Most of​ us are paying for some kind of​ loans .​
The fresh out of​ school kid is​ paying for his study loan,​ the​ guy next door is​ paying for his car loan and the​ married couple is​ paying for their housing loan .​
At some point of​ our life,​ we find that taking a​ loan is​ inevitable.
So,​ when do we take up one and when do we say no?
A good starting point would be to​ ask yourself what is​ the​ purpose of​ the​ loan .​
It could be for a​ new business you​ are thinking of​ starting,​ an​ MBA you​ would like to​ pursue,​ a​ car you​ are mad about,​ a​ house your kids would love or​ that Italian sofa your wife keeps yakking about.
For that new business
Make every effort to​ determine the​ profitability of​ your business (you need the​ profits to​ pay off your loan,​ right?) .​
Talk to​ your lawyer if​ you​ are inexperienced in​ this .​
Business ventures should be made with care.
For that MBA
For the​ career minded,​ if​ you​ are thinking of​ taking a​ loan to​ further your studies (eg .​
MBA),​ do some planning .​
Determine what is​ the​ salary difference for those with an​ MBA and those without .​
You would need a​ pay raise to​ pay off that loan! Check with your employer whether they provide study loans (if they do,​ they usually have interest rates lower than the​ banks).
For that sleek convertible
For the​ car you​ are mad about,​ think twice I​ would say .​
If you​ are going to​ take a​ huge loan just to​ get that sleek convertible that your friends are going to​ wow about,​ forsake it .​
After a​ few months,​ your convertible would have lost its wow factor and you? you​ would be strapped with a​ loan that is​ going to​ take you​ years to​ repay .​
Not to​ mention the​ amount of​ money you​ would have saved for your retirement if​ you​ hadn't taken up that loan.
For that house by the​ beach
For the​ house that your kids would love,​ talk to​ them .​
Tell them what they would have to​ forgo if​ they want that house .​
Be it​ toys,​ dresses or​ that latest mobile phone .​
Give them a​ week to​ think about it .​
Most kids would would go for the​ mobile phone.
For your wife
For your loving wife's Italian sofa,​ offer her something else of​ equal value but not as​ useless as​ an​ overpriced piece of​ furniture? Say,​ get a​ comfortable normal priced sofa,​ but invest in​ a​ better bed (you spend more time on​ your bed than your sofa,​ right?) .​
Still,​ you​ shouldn't be taking loans for furniture .​
They would have worn out in​ 2 years but you​ would still be stuck with your loan .​
Discuss with your wife what you​ can afford and what you​ can't.
The 3 Golden Rules
1 .​
Before taking a​ loan,​ always determine the​ purpose of​ that loan .​
Getting a​ loan is​ the​ fastest way to​ get cash,​ but is​ it​ worth that long term commitment?
2 .​
If you​ have taken the​ loan,​ repay it​ as​ soon as​ possible .​
Never take up a​ new loan to​ pay for a​ previous loan or​ your credit card debts .​
It adds on​ and on​ and doesn't help the​ least bit .​
Seek financial advise if​ you​ are twirled in​ this vicious cycle.
3 .​
Once you​ have repaid your loans,​ always think twice before taking up huge loans again.
Some loans are inevitable .​
Like the​ housing loan that we need so we can afford a​ shelter over our head .​
Take that loan but only for a​ decent house,​ not that house by the​ beach .​
You can have that when you​ have accumulated enough wealth to​ afford it.
Loans To Take Or Forsake Loans To Take Or Forsake Reviewed by Henda Yesti on February 27, 2018 Rating: 5

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