Fresh Finance Articles
Loans
There are advantages as well
as disadvantages that come with taking out a loan. Loans come in
many different shapes and sizes. All with their own personalized
interest rates and
incentives. It can be a confusing business. This should make it
easier:
Advantages of a loan:
1) They are so readily available these days – you can get
them from anywhere.
2) They can be as flexible as you need them to be – it's just
a matter of shopping around.
3) It is a way of gaining instant cash to spend on what you want.
4) It enables you to pay back the cost over a long period of time,
which means relatively low monthly repayments, in relation to the
amount you initially borrowed.
5) Loans can consolidate all of your existing debts, leaving you
with only the loan itself to
pay off.
6) Near enough anyone can be accepted for a loan from somewhere;
it may not be the first person you phone, but there will be a company
out there that will be willing to work
around anything that may be going against you.
7) They are easy to qualify for.
8) You can apply from almost anywhere; over the phone, Internet
or in person.
9) Most loans are deposited into your bank account within a week
of applying. It's known as a quick fix.
10) There aren't usually any upfront costs.
11) They're discreet and secure.
12) Most are renewable or extendable.
Disadvantages of a loan:
1) The short amount of time that it takes to open up a loan account
today means that, its hardly surprising that people are often insufficiently
advised and badly prepared for what
is to come. They are not focused upon the fact that it is a quick
fix into major debt, and that it can take as much as ten years or
more to clear. Many don't think of this consequence when applying.
All that is important is what is facing them at the time; which
will assumable be a shortage in money. When the repayment date arrives,
many find that they are back where they started. The difference
now is that they've got a huge lump sum in debt hanging over their
head.
2) Loans can have very high interest rates.
3) Interest on margin loans is tax deductible.
4) The fact that they are open to anyone means that some take advantage
when they need some 'easy' money.
5) One month may throw at you more to pay out than usual, which
means you may have to put off your repayment for the month. Then
you have to pay double next month. Then
you're forever playing a game of catch up. It's easily done, and
is it happens too many times it could end up costing you a lot of
money. Although it provides you with the money you need when you
need it, the cost of the over all loan may not be worth it in the
long run.
6) You must be a good financial manager or else you could find yourself
having to pay back far more than you had originally anticipated.
So as you can see, getting out a loan could prove beneficial but
costly. It's up to you to assess your situation to see how much
you really need to take a loan out. If you decide that it's an essential
thing to do financially, then the probable future downsides are
worth the risk.
Loans, themselves have been in existence specifically to assist
you when you are short on cash. Thats exactly what they are in essence.
If used correctly, and with great haste,
then they can help you out terrifically. As you can see from the
advantages list, there over all aim is to benefit you. But obviously,
this is a corporate business world in which we live
in, so there is no give without take. The repayment of the favor
is the part that makes loans something which seems to be snarled
at with great cynicism. They are potentially, not to
mention financially, damaging if taken on with naivety. The biggest
point to make is the fact that they are intended to be taken on
as a long term contract, even once the loan is all
spent. That's when the novelty wears off, and that's when the much
speculated trouble begins.
Taking out a loan, is not something to steer clear of, however they
should only be taken out when need to be, and should be managed
with great care.
Created by Rachel O'Rourke
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