About the dangers of various financial traps and why take loans only in need of the highest was written by a quantum. Therefore, I do not feel the need to carry wood into the forest and write another article about what to watch out for.
We all know how disadvantageous loans can be. It will burden your family or personal budget, and if you don’t pay it properly, you won’t be happy about yourself. But can the loan be good? Or does it have any advantages?
If you have to, you have to
Sometimes it is not the only thing you have to borrow. The bills don’t pay or disappear by themselves (believe me, I’ve tried), and at least in this way, you will seal the problems.
A bit of economic theory
I remember teaching us in financial mathematics seminars at college that money is better than money later. Apparently they thought we didn’t trust them, so they made us count the rest of the year. I trusted them now. Thus, Ipso facto may be more cost-effective to borrow now than to save years.
If you don’t believe me, you can ask any graduate economist. Just use the magic word “present and future value” and you will certainly hear an interesting lecture.
You can buy something
An average Czech man has been drinking a futro in a pub for a week before his payday, eats grass around a house and goes to work by public transport because he does not have gasoline. Sometimes it is simply impossible to save. Thanks to the loan, you can get things from higher than the first floor of Maslow’s pyramid.
Free stuff or discounts
You may receive unrelated products for some financial services. Most of these are advertising campaigns or attention from the bank. For example, I got a hakisak for a new bank account.
I also remember the event, when the bank offered an extra bargain loan backpack. This move was a blockbuster and many people have since had a super backpack for a larger snack to work, working overtime to pay off a loan they didn’t even need.
More interesting benefits are offered by a thing that has been borrowing a lower middle class for a century – a credit card. Usually you can get discounts on goods, calls, travel or hobbies.
For example, interest on a mortgage loan or building savings loan can be nicely deducted from taxes. You just have to be careful to meet all the conditions for the possibility of tax advantage. Otherwise, you will have to back everything up.
So as you can see, a loan does not always have horns and a tail. You just need to know what you are going to and (after) properly repay. And if you can refinance it and get it cheaper, the loan.