When is it okay to borrow and when should other ways be sought?

This is a rather important issue since it can actually be quite a lot of money when it comes to loans. A loan taken at the wrong time can create problems for many years to come.

When not borrowing

When not borrowing

If you have the slightest doubt that you have a sufficiently good financial position to handle the repayments, you should not borrow money. The exception would be to repay other expensive loans so that the loan you take now makes it totally cheaper. If you do not save money on borrowing, do not do it if the economy is shaky. The risk in such a situation is only that the lenders will deny your applications.

If you need money, try instead to work extra, reduce your costs, ask the family if they can help, etc. There are lots of ways to get more money and lower your costs if you think about it properly.

You should also never borrow money to pay regular bills, etc. Also, this is especially true for micro loans as otherwise it will quickly become very expensive.

When is it okay to borrow


If you pull it really hard, there are really only three types of loans that are totally okay to take. The first is a mortgage that you are probably forced to take if you are going to buy a cure. For most people, it is completely unreasonable to have enough money saved to be able to buy a home in cash. Interest rates are also not very high for this type of loan. But you can also say that it is better to buy a little cheaper housing to bring down interest costs, etc. than to buy large and have expensive loans.

The second type of loan that is undoubtedly approved is CSN loans. The grant part is not high enough if you are going to have an accommodation etc. when you study. Therefore, you simply need to borrow money and you should see this loan as an investment in your own future. Interest rates are also low here.

The last loan that is okay is a car loan. Cars are also expensive and necessary for many of us. If you do not live in a larger city and have to go to work, it is often impossible to do this in other ways than with the car. If you want a good and newer car this unfortunately costs a lot and then you are forced to borrow. Then you can always ask yourself if a cheap car that you can buy without a loan is not better.

Doubtful loans


Of the usual loans, private loans and micro loans are doubtful. Now it depends a little on what you are going to spend the money for. For example, a private loan can be used to fix the house and then it may very well be worth it.

But if it is only the question of borrowing money for consumption that often applies to private loans and micro loans, it becomes clearly more questionable. The idea you should have when considering a loan of this kind is if you really want to buy the planned one so much that it is worth the extra cost.

Then no one else can tell anyone if it should borrow or not, but this must be a decision that you make yourself. What we can only do is tell you to really think through the decision carefully before making it.