Saving money or applying for a loan?

Saving Money or Applying for a Loan?
Josh Fishy | 12-16-2015

Saving money and applying for a loan could either help us out of our financial problem. But which option is favorable all depends on us. Read on to decide whether to save money or apply for a loan.

When we are on a tight budget, we usually save money in order to buy something we want in the future. If we can apply for a loan, we also consider it as an option.

save or borrow

While saving or borrowing an amount we need has its advantages and disadvantages, either of them fits our needs and lifestyle. Below, we make a list of common pros and cons of these two alternatives which help us make it through the times of financial woes.

SAVING
Advantages
Disadvantages

Obviously, you won’t be in debt which you might have been to suffer for months or years. And so, there’s no need for you to tighten your   budget even more due to lesser net take home pay.

It takes time before you can buy what you have saved for. If you save for building your dream house or buying your first car, waiting for the time till you can afford to make those dreams of yours come true seems to take forever.


You are in control of how much you take from your monthly income and you can vary your monthly savings as well depending on your financial capabilities.


You can’t be certain that the money you save won’t be used for unexpected occurrence that entails financial remediation.

Saving per se teaches you to value your money, the things you buy and your work. Given the time you wait to save up a certain amount, you know how tough it is to see your belongings destroyed or to lose all of them.


Putting your money in a bank is better and safer than hiding it in your closet. But, either of them can be risky, especially if it involves a huge amount of money.

BORROWING
Advantages
Disadvantages

You can get the money you need in a day or two and use it in whatever you intend to buy with it instantly.

You have no choice but to pay your monthly obligation as to how much and for how long depending on the payment term and method you have applied for.


If your debt is to be deducted every payday through payroll, then you don’t have to worry about where to get the money to pay for it.

Although there are banks that grant unsecured personal loan or does not require you to have co-makers and collateral, most loan companies ask you to have either of them.


Like saving, borrowing money makes you treasure you belongings as well as your job.

Once you have started to borrow, you seem to depend on it even at times when you can still get by even without applying for a loan, which in the long run you could hardly find your way out of being in debt for years.

1 comment:

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