What not to borrow. Should I take a bank loan? opinions and reviews
Today, it is possible to acquire the desired material goods at the expense of borrowed bank funds. Insofar as bank loans have become widely available to almost every able-bodied citizen of our country, many of them do not neglect this opportunity. Of course, if you take loans recklessly and inappropriately, then you can simply end up in a debt hole. And to prevent this from happening, you need, among other things, to know when it is most profitable to issue a bank loan.
In different periods of time, bank loans become either cheaper or more expensive, this largely depends on the economic situation in the country as a whole. It follows that it is important for each borrower to determine whether it is possible and worthwhile to take out a loan now, or is it better to wait for some time, when the Central Bank of Russia will lower the key rate on short-term loans. This will help the borrower, first of all, to issue a bank loan on favorable terms for themselves and minimize their own risks.
The feasibility of bank lending
The financial services market is full of various kinds of offers. Among other things, due to fierce competition between financial institutions, each bank tries to offer the potential client the most comfortable conditions for cooperation, in order to win their niche, lenders reduce the annual interest on loans and make loans more accessible to the public. Clients, in turn, actively use banking offers and do not even think about the question of whether it is profitable to take a loan now, and in fact, literally after a short time, it will be possible to significantly save on interest payments.
Unfortunately, the big problem of most borrowers is the low level of financial literacy, few people think about the fact that bank loan rates for the population also largely depend on the economic situation in the country. If we characterize the economic situation, then bank lending becomes cheaper for the end consumer when the inflation rate in the country is minimal, it is during this period that the Central Bank reduces the key rate on short-term loans.
To give a simple example, the last crisis in our country came in 2014 due to sanctions imposed by the United States and the European Union, as well as conflicts in Ukraine. It was this year that the dollar exchange rate sharply increased against the national currency, and banks suspended the issuance of large loans to the population, that is, they suspended housing lending, even the largest banks Sberbank, VTB24, although they did not abandon mortgage lending, but significantly reduced the volume of targeted loans issued loans. This was associated with high risk, when the inflation rate rises and purchasing power is significantly reduced.
Please note that the key rate of the Central Bank changes quite often, so if you are thinking about applying for a bank loan, be sure to check this information, it will not be difficult to find it from open sources on the Internet.
The situation in the credit market in 2018
At the moment, in 2018, the situation in the domestic Russian market has more or less stabilized, although it requires some changes. Indeed, in a few years, Russia managed to overcome pressure from the United States and the European Union, but nevertheless, the financial situation has not reached the level where banks could issue cheaper loans to the population. In fairness, it should be noted that the Central Bank is 100% fulfilling its function and is striving to maintain the inflation rate and reduce the key rate.
Although credit organizations depend on the Central Bank of Russia, they still conduct an internal policy and, on the basis of their own regulations, issue loans to customers. Loan rates have indeed become lower than a few years earlier, and loans have accordingly become more affordable, but not for everyone. Due to the high percentage of insolvency, banks incur losses and are more selective about their customers, first of all, you need to know the basic requirements of credit institutions for customers:
- working age from 21 to retirement;
- a permanent source of income, that is, the client must be registered in accordance with the Labor Code of the Russian Federation;
- positive credit history;
- permanent registration in Russia.
This is the minimum list of bank requirements for a potential client, but at the same time there are additional requirements. For example, credit institutions rarely approve loans to borrowers who work for individual entrepreneurs, and preference is given, on the contrary, to employees of large, preferably state-owned companies.
Please note that it is important for each bank to maintain its business reputation, because if you conduct an ineffective credit policy, that is, approve loans to all applicants, then the bank’s loss grows along with this and it may lose its license at the initiative of the regulatory authority.
When applying for a bank loan, each potential borrower, first of all, should think about the appropriateness of the loan. That is, if the bank offers a high percentage, then it probably makes sense to refuse cooperation. In fact, many borrowers have a chance to get a bank loan, even those who, for one reason or another, do not fit the basic requirements of the bank. But here you need to be prepared for the fact that the bank will tighten the terms of cooperation and offer a higher annual percentage, hence the question arises whether it makes sense to take a loan on unfavorable terms.
It is also worth noting that over the past few years, overdue debt in the bank's loan portfolio has been growing rapidly. This is probably due to the fact that during the crisis many of our fellow citizens found themselves in a difficult financial situation or completely lost their source of income. Therefore, banks are more selective in the selection of applicants. By the way, in the financial services market, you can get a loan only from a bank, but also from microfinance companies, which everyone has probably heard of. True, it is worth considering here that the transaction will be enslaving for the borrower, which means that there is no point in such lending.
How to get a loan correctly
I would like to start with the fact that each client must answer a number of topical questions for himself, which we will give below. But still, you should not abuse borrowed funds, because in any case they are subject to return. The fact is that some borrowers uncontrollably issue bank loans and eventually fall into a debt hole, from which it will be quite difficult to get out later.
So, before you go to the bank you need to answer yourself the following questions:
- Do I need a loan. Sometimes borrowed funds are taken for uncertain needs, that is, the borrower first draws up a loan, and then distributes the borrowed funds. This should not be, if you really have a need for bank funds, then, undoubtedly, here a loan will help solve current material problems, if there are no specific goals, then you should refuse to go to the bank.
- How much to borrow. Before going to the bank, determine the exact amount that you need to meet your current consumer needs; you should not borrow more than you need, for example, to repair an apartment or buy new furniture. Of course, sometimes, in addition to the mandatory ones, you want to realize your other desires, but it is better to do this at your own expense, but non-bank ones.
- Determine how much of the monthly payment you can make towards paying off the loan without compromising your personal consumption needs, it must be reasonable and not burden your budget.
What is the best loan to take today?
Banks offer a wide range of loans for various needs, so the choice of a banking product will largely depend on the goals that you are pursuing. For example, if you want to purchase any goods, then you can choose a non-targeted consumer loan, if you want to buy a car, then the car loan program is ideal for you, if it degenerates in a residential building, then a mortgage is the only way out for you. Therefore, now we will consider which loan is profitable to take today, and which purchase should be postponed until better times.
consumer credit
Here we will consider not only a bank loan for consumer needs, but also plastic cards with a credit limit. It would be advisable to take a consumer loan if you are planning any purchases. Here you need to determine the exact amount of the loan and then only contact the bank. If you wish to make any small expenses or need cash as a financial cushion, then credit cards would be the best option.
If we talk about interest rates, then consumer credit is cheaper for the consumer, especially since today the annual percentage has actually fallen by about 2-3 points compared to previous periods. But on a credit card, interest rates have not changed, which is due to the fact that the bank provides an opportunity to avoid paying interest if you use credit plastic correctly.
Please note that the main problem of every credit card holder is the inability to use the grace period correctly, therefore, before making purchases on a card with a credit limit, be sure to carefully study the terms of service.
Target car loan
If you want to buy your own car, most borrowers study the market for services and offers for car loans. Although today it is not at all advisable to take a car loan, and there are several main reasons for this. First of all, car loan rates are higher than consumer loans. The second reason is that it is almost impossible to get a loan without CASCO insurance, and an expensive policy significantly increases the cost of the loan. Finally, the third reason why you should refuse car loans is the need to make a down payment.
Although in fairness it should be noted that you can get a car on credit, but only under the state subsidy program. Here, the borrowing scheme will look like this: you issue a bank loan, and part of the overpayment to the bank will be paid from funds from the Federal budget. True, here the choice of the buyer will be limited by the conditions of the programs.
mortgage loan
Oddly enough, but now is the most comfortable period for obtaining a mortgage loan. First of all, banks have significantly reduced the annual interest on mortgage loans compared to the previous period. The second reason is the decline in real estate prices, so if you are thinking about getting a mortgage, now is the most favorable period for this. Among other things, if the mortgage was issued earlier, then today you can get a loan for refinancing and thus reduce the overpayment.
Please note that banks today are more willing to issue mortgage loans for the reason that, thanks to various government programs, part of the funds is compensated from the state budget.
To summarize, applying for a loan is a strictly individual matter, that is, the borrower must first determine how much he needs borrowed funds, how much he needs, and how he will repay the bank loan. As for interest rates on various loans, the annual percentage has actually decreased by several points for some types of loans, which makes loans more accessible to a wide audience.
The question of the advisability of obtaining a loan is regularly asked by a large number of people. This is quite logical, since obtaining a loan is a relatively simple and fairly quick way to obtain financial resources directed to the purchase of any goods or services, which are almost impossible to pay without borrowing. Of course, such a development of events looks profitable and attractive, especially if there are no effective ways to save and accumulate own funds.
However, when deciding on a loan, you need to understand its consequences. They are connected, first of all, with a serious increase in the financial burden on the borrower, who will be forced to give a significant part of the income to the credit institution for a certain time. It is important to note that the load will be the greater, the more serious the acquisition was made.
Is it worth taking a bank loan?
Of course, there is no single answer to the question of whether it is worth taking a loan from a bank. The explanation for this is quite simple - the topic is extremely complex. Moreover, two different people may have different opinions about the appropriateness of a loan, being in the same situation, and the position and decision of each will be fully justified. Therefore, it is necessary to carefully consider the pros and cons of lending.
First, you need to understand what a loan is. This term usually refers to borrowed funds that a person takes from a bank with an obligation to repay within a specified period and with interest. The amount of payments in excess of the principal amount of the debt is called an overpayment and depends on the established interest rate. By and large, it is the value of the rate that is the most important parameter that determines the feasibility of lending. Other important factors are the rate of inflation, the level of development of the credit market and the state of the economy.
Is it worth taking a car loan?
The car rarely acts as a commodity of prime necessity. Therefore, it is advisable to issue a loan for its purchase in the event that it allows you to get a significant discount or a serious rise in price is planned in the near future due to an increase in duties or an increase in the exchange rate. In other words, car loans are beneficial if the resulting savings are comparable to the amount of interest paid on the loan in the future.
Should you take out a home loan?
The situation when obtaining a loan to buy a home is somewhat different. In most cases, in this situation we are talking about a mortgage, that is, obtaining a loan secured by the purchased apartment or private house. Most experts consider this type of lending to be the most appropriate. This is due to several reasons:
- to buy a home, a significant amount is required, which is almost impossible to save;
- housing has a high level of liquidity, which allows not to attract other collateral;
- the interest rate on a mortgage loan is one of the lowest compared to other types of loans;
- the cost of housing often not only does not fall over time, but even grows.
Of course, there are also very serious disadvantages of mortgage lending. The main ones are a long loan term, during which the borrower will have to give a serious part of the income to the bank.
Should you take a secured loan?
Registration of collateral for a loan in the form of a pledge or guarantee is one of the most effective ways to obtain bank approval for a transaction. However, it is necessary to understand that in the event of financial problems for the borrower, the real option for the development of events will be the transfer of collateral to the property of the bank. Therefore, it is necessary to take a loan secured only if the client is firmly confident in his own financial capabilities.
Lending risks
The lending process involves risks, both on the part of the bank and the borrower. Naturally, a person almost always risks much more, because he simply does not have the resources of a credit institution. The most serious risks are:
- increase in interest rates;
- the onset of a crisis in the economy, which may result in a decrease in income and the inability to timely service the loan;
- sharp fluctuations in the exchange rate, especially if the loan is issued in dollars or euros, etc.
Pros and cons of loans
The main advantage of obtaining a loan is the possibility of making a purchase, which a person is unlikely to ever be able to make without attracting replacement funds. The number of disadvantages of lending is much greater:
- the need to pay not only the amount of the debt, but also the interest accrued on the loan;
- the possibility of becoming dependent on the bank in the event of any financial problems. This is due to a sharp increase in payments due to penalties and interest;
- the risk of losing not only the purchased goods, but also other property of the borrower.
What other loan options are there?
In addition to those described above, there are several other popular types of loans. These include:
- consumer. In fact, a car loan is a kind of consumer loan, the characteristic features of which are a relatively small loan amount and a short term, rarely exceeding 2 years, and usually ranging from 6 months to a year;
- for repairs in an apartment or house;
- educational or recreational;
- for business development.
Each of the described types of loans has its own characteristics, but the basic principle remains the same - the client repays the debt with accrued interest, and the appropriateness of the loan is determined based on the interest rate and the duration of payments.
How to do without loans?
Obtaining a loan, according to most experts, is most expedient in a stable economic situation in the country. Therefore, now is not the most favorable time for applying for a loan. This is explained by the fact that during a crisis, the risks of losing sources of income for the borrower increase significantly, therefore, the chance of difficulties with servicing and repaying the debt increases, which can lead to serious financial losses. As a result, the decision to apply for a loan should be made after thinking carefully and weighing the pros and cons.
This is the first question you should answer before going to the bank. It is possible that there is not enough money for the treasured purchase due to the peculiarities of your approach to financial management. If you review it, it is possible that you will not have to borrow money.
Analyze where your funds are going. Surely you have a mobile application of the bank - it's time to study the statistics and structure of expenses. Most likely, the result of the study will surprise you unpleasantly: we often spend money on all sorts of nonsense, sin with impulsive purchases, and then suffer that we have to live paycheck to paycheck.
Calculate how much you could save by cutting out unnecessary expenses. If the amount is comparable to the planned monthly payment on the loan, you can do without the help of the bank. Yes, you will have to deny yourself small joys, but you were going to take a loan for a reason. For the thing you dreamed about, you can often save up on your own. You just need to pull yourself together and stop throwing money right and left.
If you have large expenses ahead, such as repairing or buying a car, you will have to save for a long time. Credit is the right decision. Once a month, you will repay the debt to the bank in small installments, without worrying that prices are rising and you have to save more and more.
How do you know how much money to borrow from a bank?
If you cannot do without a loan, calculate all the risks in advance. Subtract from your salary monthly expenses for utilities and communications, food, travel to and from work. Divide what's left in half. The result is an approximate amount that you can give to the bank and not be stranded at the same time.
It is worth calculating the loan amount and the time during which you plan to repay it in such a way that you spend no more than 30% of your income per month. Ideal - 20%. It will take longer and with an overpayment to return the money, but you will be sure that, in principle, you will be able to repay the loan.
A good option is to create a financial airbag in advance of at least three of your salaries. If unexpected expenses arise, she will help you make the next loan payment on time.
Do I need to insure a loan?
Imagine that events develop according to a very bad scenario. You borrowed money from the bank, but suddenly you were left without a livelihood. Illness, dismissal, whatever - the loan still has to be repaid. The bank can help you with this.
Raiffeisenbank, with which we wrote these cards, has a financial protection program for borrowers. It is valid for consumer loans and allows you to fully repay the debt to the bank at the expense of the insurance payment. You can apply for participation in the financial protection program when filling out an application for a consumer loan.
For example, if you lose your job, Raiffeisenbank charges you a monthly payment while you are unemployed. At the end of the month, this money will come to your account.
The decision not to insure a loan is an extremely dubious idea. We cannot say with certainty what will happen even in a month, not to mention longer periods. If you don't need bank support in the end, that's fine, but in which case you have where to turn for help.
What else do you need to know before applying for a loan?
Find out if the bank has additional bonuses for borrowers. For example, Raiffeisenbank has launched new conditions for consumer lending: a year after the loan is issued, the rate is reduced from 11.99% to 9.99%. Such conditions are possible when applying for financial protection. If you still do not want to insure the loan, the rate for the first and subsequent years will be 16.99%.
The reduction in the rate fixed in the contract is now especially relevant. The Central Bank has recently been constantly reducing the key rate. As a result, bank rates on loans decrease.
For example, in 2018, the key rate is expected to be reduced by 1.25%. Accordingly, interest rates on consumer loans will also go down. If the contract stipulates a rate cut, like with Raiffeisenbank, you will not have to waste time and nerves looking for profitable refinancing options.
It does not matter how much and for how long you borrow. In any case, the rate in the first year will be 11.99%, and then will decrease to 9.99%.
A loan is a convenient and profitable financial instrument if you study the conditions in advance and assess the likely risks. Decide if you really need it, and soberly assess your options regarding the total amount and monthly payments. With a reasonable approach, credit will not turn into a constant headache and a source of anxiety.
The life of most of our compatriots is such that you have to save up for any more or less decent thing. But with the advent of loans, this problem began to be slowly resolved - you can make a purchase now, and repay the debt to the bank gradually, while overpaying not so significant amounts. The crisis, as always, confused our plans and now it is not clear whether it is profitable now to take a loan from a bank for current needs, vacation, car or phone? Is it worth doing this in a period of unstable economic situation in the country? Let's try to deal with this issue in our article.
Difficulties in obtaining and repaying
To begin with, you need to manage to take this very loan today. It's no secret that with the advent of the next wave of the crisis, banking institutions began to curtail their lending programs. After all, they have lost foreign resources, and their funds are not as much as we would like. This situation especially affected the subsidiaries of foreign banks - the crisis in their home country affected the financial condition of subsidiaries in Russia.
Another problem is the decrease in the real income of the population, and, accordingly, the solvency of citizens. This situation is accompanied by a rapid increase in overdue payments, which negatively affects bank income.
Now the situation is quite difficult - it is difficult to get a loan, there are few profitable offers, and all kinds of "15% per annum" hide a huge amount. Loans are extremely expensive, so it is important to properly assess their feasibility. Do you really need a new car or refrigerator? And if the purchase cannot be postponed in any way, then it is worth making every effort to obtain a loan without hidden fees.
Just getting a loan is half the battle. After all, it needs to be repaid. And times of crisis have always been accompanied by a decline in incomes among the population. It’s good if you just “cut” your bonuses, but you can also get laid off. And then you will be left with a new washing machine, but without a job and with a decent debt. This is how many have ruined their credit history and forever ended up on the black lists of banking institutions. And it's not far from there.
So is it profitable to take a loan today, if you look at the situation from the side of personal finance? Most likely no. The risk is incomparable with the likely benefits.
Pricing in Times of Crisis
For the layman, the word "crisis" is always associated with an increase in prices for everything. It would seem, what do dollars have to do with it? The same bread is not baked from them. The thing is that when the ruble exchange rate falls, it is primarily fuels and lubricants (POL) that rise in price. And this is one of the key cost items for current entrepreneurs, so prices rise on everything from matches to real estate.
But now we will forget a little about the little things and remember those needs for which you need to save up or take a loan. During a crisis, your savings may no longer be enough to make your dream come true, albeit small. Rising prices "eats" part of the savings. Therefore, some experts believe that in this situation, the purchase of goods on credit is a justified decision. You can buy now, at the old price, then it will be much more expensive. Moreover, in some cases, bank interest on a loan turns out to be much cheaper than the difference in the cost of goods after a rise in price.
But there is another opinion. The crisis is not eternal, after it prices may drop to the previous level, and you will already have a loan, and not always profitable and with attractive interest rates. And no one will give you a guarantee that you will be able to serve it at all.
Buying real estate is the right decision. In times of unstable economic situation, the demand for housing falls considerably, and developers still need to sell it and earn their bread and butter. Therefore, with each crisis period, experts begin to predict a decline in real estate prices. Indeed, some are reducing them, especially if these prices were exorbitant before the crisis. But as practice shows, in general, the upward trend in the cost of housing stock continues.
So is it profitable to take a mortgage loan? Here, too, there are two opinions. If you see a price drop with this particular developer, you can try to get a mortgage and buy an apartment (house), especially if it was planned in the near future. But it is also not necessary to indulge in panic and rush into the pool with your head. Remember that the mortgage will have to be paid for at least 10 years. The crisis, as we have already said, is not eternal, and after it, interest rates on loans, including mortgages, will definitely decrease. Maybe it makes sense to wait a bit?
Trying to make money with credit
Most of our fellow citizens react to the crisis as if it were wartime, stocking up on everything they need to the maximum and taking the position of a modest, quiet observer. But there are also such brave comrades who recommend earning money with the help of credit money during a crisis.
Indeed, it is possible. Having taken a non-targeted consumer loan, you may well buy foreign currency with all your money and wait for it to rise in price. In a crisis, you will not have to wait long - the ruble will definitely fall, and you will be able to repay the loan, and even keep the amount of the exchange rate difference.
Everything works out perfectly on paper, but in life surprises come unexpectedly, as in the well-known saying: “smooth on paper, but forget about the ravines.” And not always the predicted growth or depreciation of the currency is justified. For such earnings, it is important to be a financially savvy person and be able to predict the state of the courses at least a day in advance. To be honest, not all experienced stock players do this. If tomorrow the dollar you bought suddenly falls in price, you will have an amount in your hands that is much less than the original, and even a loan in addition, along with its interest. What will you give, good people, eh?
Summarizing all of the above, one conclusion can be drawn - it is unprofitable to take a loan in a crisis, especially for a simple layman. Bank credit programs are now completely unattractive, and therefore all risks cannot be called justified. Financially savvy citizens in most cases will be able to benefit from a crisis situation, but this is not guaranteed for them either.
Well, to be honest, taking a loan is never profitable, unless it is an investment in the development of your own business (business), which in the near future will bring benefits that cover the overpayment on the loan received. But that's a completely different topic...
Is it worth taking a loan from a bank: an overview of the lending scheme + 10 advantages and disadvantages of applying for a loan + 4 reasons to take a loan + 4 reasons to refuse it.
When there is a need to purchase something expensive or a large amount of money is urgently needed, the first thing that comes to mind is to apply for a loan. But before you go to the bank, you need to think carefully, is it worth taking a loan?.
It is necessary to objectively assess the situation, weigh all the pros and cons, analyze your ability to pay, and only then make a decision.
In this article, we will analyze what a loan is, what are its pros and cons, and consider the reasons why it is worth or, conversely, not worth taking a loan.
Scheme of registration and types of credit
Let's start with the definition of credit.
Credit is a financial transaction in which creditor(person lending) undertakes to lend borrower(a person who borrows) a certain amount of money.
In this case, the borrower must repay the amount of the debt, taking into account the interest premium, within the period specified by the lender.
Depending on the purpose for which a person takes a loan, there are such types of them:
- A car loan is a loan to buy a car.
- A home loan is one of the most common loans needed to purchase a home.
- Land - is issued when the borrower intends to buy a land plot.
- Educational– a loan to pay for tuition, usually in higher education institutions.
- Consumer- the most popular today, designed for small expenses of citizens (purchase of equipment and other goods).
All conditions for obtaining a loan and other nuances must be spelled out in loan agreement which is between the lender and the borrower.
The loan agreement usually contains the following terms:
- Debt amount.
- Loan interest rate.
- Amount and frequency of payments.
- The total repayment period.
- in case of breach of contract.
All banks have different offers in the financial services market. But the general scheme for obtaining loans is almost the same and consists of five stages.
These steps may differ depending on the purpose of the loan.
For example, in the Bank of Moscow, you can independently make an application and fill out a questionnaire. You just follow the link to the site ( https://anketa.bm.ru/kredit_nalichnimi) and choose the conditions you need (amount of money, payment period).
After that, you fill out a questionnaire with your personal data and wait for the bank to consider the application. Typically, this is about 15 minutes.
So you can find out without even leaving your home.
Advantages and disadvantages of lending
1) Benefits of obtaining loans: 5 pros
You can borrow money at any time you need.
In life, there are often situations when money is urgently needed, but there is none.
At such a moment, a loan can literally save you, especially if you do not have friends or relatives who could help out.
A loan will allow you to purchase the necessary expensive thing now, and not after a long period of time.
This applies mainly to household appliances. If your refrigerator or air conditioner breaks down in the summer, the bank will help solve the problem.
You can also purchase a computer for work if you need it urgently.
You will have the opportunity to purchase your own home.
In our time, it is financially difficult to purchase housing immediately.
It is much more rational to get a mortgage and live quietly, rather than spend your whole life in rented apartments.
You can take out a loan to organize your business.
If you want to do what you love and start your own small business, it is advisable to take out a loan.
So you can increase your earnings and pay off your debt faster.
With the help of a loan, you will feel like a free person.
When you have additional capital, more opportunities will appear.
You can take, for example, a car loan and buy a car that will generate income (as an option - delivering pizza or sushi, and making money on it).
In short, loans have many advantages. But it is not for nothing that many people are afraid of living in debt. And not in vain!
2) Disadvantages of concluding loan agreements: 5 “against”
Waste of time on paperwork.
In order to collect all the documents necessary for the bank, you will have to spend time.
And there is no guarantee that the bank will make a positive decision on granting you a loan.
Availability of interest rates.
Whatever the interest rate, you still have to pay back more than you borrowed.
Deceptive bank offers.
Many banks, in order to attract customers, promise them loans without paying interest.
But they are silent that even if you do not pay an interest rate, you need to pay for banking services (about 3% of the loan amount) and a down payment (up to 15% of the amount).
Calculation of fines and penalties.
If you are a little late on payments or could not repay the loan amount by the end of the loan period, the bank will charge you a fine and it will be even more difficult to pay off the debt.
Risk of losing everything.
Life is unpredictable and anything can happen - you can lose your job or get sick.
And it is unlikely that the bank will be interested in your situation and will give you a delay.
Everything is clear with the pros and cons, but how can you still determine whether you need a loan or not?
Let's review the most rational reasons, with the help of which you can easily understand whether it is worth taking a loan.
4 reasons to apply for a loan
Reason #1. Desire to get back on your feet.
This goal is pursued by almost all young people in modern society. Many want to quickly build their lives, achieve success and become independent.
But in the conditions of our time, it is very difficult for ordinary students to do this.
Then a loan is a good option in order to gain freedom. But, of course, only if you are a financially literate person and can calculate your strength rationally. It is very important in such a situation not to fall into a debt hole.
If you are young and full of ideas, you can use a loan to increase your income or improve your living conditions, thereby becoming independent.
A loan is worth taking in this case:
- On housing to get the freedom of space.
- For a car that can become your source of income (if you convert it into a coffee car or for another).
- For training, then to get a decent education, work and, accordingly, a standard of living.
The main thing in striving to become independent is to be reasonable, and not be led by emotions. Then this type of loan will justify itself.
Reason number 2. Eagerness to start your own business.
If you are already ripe in your life to create your own business, and are ready to work hard to achieve success, a loan is what you need.
Due to progress in all spheres of life, every day people have more and more business ideas that are unique in nature. And since these ideas are mainly developed among the younger generation, the first problem for starting a business is the lack of capital.
In such cases, lending is a viable solution.
But here, too, you need to be careful. And if you decide to take out a loan to open your own business, do not forget:
- In advance, to know how much money and for how long you need to borrow.
- Calculate the profitability of your business in order to be able to repay the debt in the future.
Well thought out business idea.
You must be sure that there is a demand in the market for such goods or services.
If you carefully approach the formation of your business project in advance, you will most likely be able to make a rational decision.
Reason number 3. Desire to move up the career ladder.
Let's say you have the opportunity to change jobs or get promoted, but to do so you need to work from home more and get a good computer or laptop that you can't afford.
The way out is to take out a loan. Of course, if you can pay it.
Many will say that this is stupid, because it is better to save money for the purchase of such equipment than to go into debt. But it is not so. If the device is needed right now, and during the period during which you will save money, you can already achieve success, then, for sure, it is better not to miss such a chance.
But it's up to you, because only you can determine your ability to pay. Weigh well all the pros and cons, calculate whether the loan will justify itself, and only then draw a conclusion.
Reason number 4. The need to purchase housing.
Taking out a home loan or mortgage is the most popular reason to go into debt. After all, you must admit that in order to buy equipment you can still save up, but in order to buy an apartment, it will take too long to save up.
Again, getting a mortgage is a serious matter, so it's best to take out a loan if there are really very good circumstances for this.
Reasons to take out a home loan can be:
- Expanding your family- if living with other relatives causes discomfort, of course, it is better to move out.
Creating a family - young people, as a rule, do not have much money to buy their own home.
But if you can afford to borrow, it's worth a try.
Getting a job in another city You may have been promoted and need to move.
For such a case, a mortgage is a rational solution if the new job will bring a solid income.
As you can see, the reason is really weighty, but only if you are ready for a long debt repayment.
Actually, there are really justified goals for which a loan is a way to start a new, better life. But every medal has two sides, so we will also discuss the reasons why lending should be abandoned.
4 reasons to refuse a loan
Reason #1. Unforeseen circumstances.
None of us can know for sure what the near future holds. Perhaps someone will be lucky, and someone may face force majeure.
In this case, the latter are:
- Dismissal from work.
- Loss of property.
- Deterioration of health.
These are the main unforeseen situations that can overtake anyone. As a result - the inability to repay the debt on the loan and the debt hole.
Of course, you can’t think only about the bad, but these factors should be taken into account. Especially if you are not confident in your ability to repay the loan amount.
Reason number 2. Insufficient solvency.
Experts recommend taking out a loan only if, in addition to the main source of income, you have some additional material savings. These same savings should be at least equal to your salary for 3 months.
Only in this case, professionals assure, you can be at least a little insured against force majeure situations. If you do not have such savings, then you should not tempt fate.
An exception can only be unpredictable situations, for example, if you urgently need money for an operation or treatment.
Reason number 3. The unreliability of banks.
Someone thinks that banks are the only reliable institution where you can. Others are convinced otherwise.
There are many unpleasant situations that can happen while you pay off the loan amount:
- The bank may go bankrupt.
- The bank may raise the interest rate.
- The collapse of the currency is possible.
Whichever of the above happens, you could lose your money, or at least overpay too much. Therefore, to apply for a loan, you should choose only proven, reliable banks.
You can find information about the best institutions here: https://www.banki.ru/banks/ratings
And do not forget to take into account the economic situation in the country at the time of lending.
Reason number 4. The desire to be "like everyone else."
Despite the fact that the majority of people in our country are educated and progressive, very often people are too susceptible to public opinion and strive to be "like everyone else."
This very opinion often pushes the population to take loans, which, in the end, will not lead to anything good.
People succumb to emotions, strive to live the life that, unfortunately, is not yet available to them. Most people want to be like on the cover of a magazine. As a result, they are up to their ears in debt.
But think twice, weigh all the arguments and make the right decision. Don't let the majority opinion drive you to do stupid things.
So still, is it worth taking a loan, and if so, for what exactly?
This video will help you make the right decision!
Whatever the case, the final decision is it worth taking a loan, is up to you. It is impossible to answer unequivocally whether a loan is good or bad. It all depends on a lot of circumstances.
And if in your life, a situation has happened that, as you think, forces you to take a loan, do not rush to conclusions. Think again, weigh the pros and cons, consult with your loved ones and only then decide whether or not to take a loan.
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