When Does it Make Sense to Borrow?

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borrowAs I mentioned in my earlier post, there are many things in life that we don’t have any control over. During these difficulties, there’s nothing wrong to seek financial assistance when need be. Whether it’s a loan from a bank, family, or friends, there will come a time that we will need to take on debt.

Of course, so long as there’s a reasonable use for the money you intend to borrow, and you can pay back what you owe on time, you’ll be fine. Here are some ways to borrow responsibly.

Borrow for Home Purchase/ Improvement

Owning your own home is just the ultimate dream for every adult worker, and one of the major reasons why we need to take on debt at one point in life. If the cost of rent is just too much, that you’d be better off in paying the mortgage, then do take a home loan.

Borrow for an Auto Loan

Probably the second most expensive and most important property you’ll have next to a home is your car. In fact, buying a car first can be more attainable for many. Being able to drive your own vehicle is not only convenient, but is also very useful for professional improvement.

Borrow for Education

If there’s a best investment in life, that would be your education. As you finish your studies and get a degree, you’ll be able to advance career wise.

Borrow for your Business

To soar high and live your entrepreneurial dreams, you’d need to take a loan to support that planned business expansion.

Loans You Should Avoid as Much as Possible

High Interest Loans

If you’re a still a starting borrower, or you have poor credit, chances are you’ll be faced with high interest loans. As much as possible, refrain from falling for these loans unless the need is urgent and you have exhausted all means.

Secured Loans

Secured loans are those loans which are tied to an asset. This is very risky because you can lose a valued property. Sometimes, you may be required to secure collateral if you intend to borrow a huge amount or if you have bad credit rating. An example of this is a logbook loan, which are secured against your vehicle. This type of loan is meant for those with bad credit and is very expensive. There are many logbook loan providers in the UK such as JustLogbookLoan.

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