Is it worth borrowing? Pros and cons of lending.

Is it worth borrowing?

Is it worth borrowing?

Is it worth borrowing? This kind of problem at least once faces almost every person in our time. But still, numerous advertisements and smiling girls from banks and credit departments of stores assure that this does not pose any problem - the conditions for getting a loan or making a purchase on an installment plan are becoming easier and the offers are becoming more profitable ... But after the financial crisis that took place in 2008-2009. financial analysts increasingly mention the phrase “credit crunch”.


Therefore, it is necessary to find out what such a loan is - a tempting trap for very naive consumers or is it the best way to spend your money? Our site will try to help you understand this issue!



Consumer loans



This name has loans in small amounts, which are issued to individuals under minimum guarantees from borrowers for a relatively short period (usually not more than three years).At the same time, the creditor bank will not ask you what you will spend the borrowed money, even if it is possible, it will not require a deposit, but only a statement of income! Is not beauty! However, is it worth taking a consumer loan?


A bank is a bank, but for yourself you have to give an honest answer - what will you spend money, which is not enough to buy real estate or a car, but quite enough to go on a tempting journey, buy some household appliances, perform repairs?


And here on these very things - repair, appliances, a vacation permit (although, of course, some businesses even start with a consumer loan!) ... The loan repayment period is short, the amount is not ruinous - why not take a similar loan for something necessary?


But it is for such type of loans as consumer that the banks take the highest percentage (about 20% of the loan amount itself!).


If you take a loan in cash, then you can still be charged about three percent of the commission (as a result, 24% is obtained, one fourth of the amount). And besides, one should carefully study the banking contract - at an imaginary profitable interest rate, a considerable amount of hidden fees can hide in the contract - for example, for cashing in, early repayment (sometimes that happens)for the use of credit and so on. Here was a normal consumer cash loan from VTB 24 without guarantors.


So now think, is it worth taking a loan, practically paying off a large purchase by as much as 24 percent more? If the need to purchase is not very urgent, then for the same six months it is quite possible to save the same amount and purchase a more modern version of the coveted gadget.


All the same, you do not want to postpone this purchase? Try to explore the offers of various stores: often in the store you can arrange a purchase on credit, but at much lower percentages or even without them!


And plus to everything .. our world is not so durable. Even if such a monthly payment is quite possible for you, for a couple of years everything can change a lot - we are talking not only about the vicissitudes of your personal career, but also about how fragile the economic balance in this world is.


In 2009, many were in the role of “slaves of credit” - and there was a rise in prices, the exchange rate changed, and it was necessary to pay as before!



Credit card



A credit card can be easily issued, just go to any bank, having a passport with you - and it takes about 15-20 minutes.


You have a plastic credit card with a credit limit, which, as a rule, does not exceed the average salary in the country. Interest rate is missing - hooray! But only, the repayment period is short - only from ten days to three months. But a credit card would be quite a good option to find money before paycheck!


And if you use the card often and return it taken on time, then you can raise the credit limit! However, is it worth taking a loan on such a card?


As a trick here is the psychology of consumers. Despite the fact that the amount you can withdraw and spend is limited, the simplicity of its use gives rise to some illusion of ease of money. Almost freebies!


People do not dwell on long thoughts, what they get, how much it is necessary ... Well, well, well, I indulged myself with various goodies in a supermarket, went to a restaurant with a girl, or bought decent jeans for once ... Whack! And the loan is already gone!


Well and that, the consumer will think, I will return from a pay. And returns. And the feeling is as if the salary was not ...


To try to ensure the standard of living to which he was used, our character again turns to the magic credit card! And again, and again ... And here he is, and the limit is also raised!


The result is an infinite sense of "burden of duty", although it seems that nothing large and serious was bought. A person falls for the cunning trap of expenses that exceed revenues - in fact, in fact, there is no “freebie”!


Are you the same as this frivolous character?


Do you have a specific plan for the proper use of this money, are you sure that you will be able to give it in time? Then you can get a credit card, use it only once for the purpose, and then give it back to the bank, that is, deactivate the credit card.


Well, or throw it into the farthest corner and not take it with you in your wallet, so that there is no temptation to pay with a credit card in a supermarket!



Credit purchases



Household appliances, clothing from famous brands, tours - now almost everything can be purchased in installments! As a rule, the percentage is lower than what banks take, and if you're lucky, you can find a purchase option without interest at all!


Naturally, it is worth taking such a loan! But what's the catch here?


Everything also - it's all about consumer psychology. Having been tempted by the simplicity of design and the absence of large exactions, the buyer decides to issue a loan (usually not stretched for more than one year) on one product, and then on the other ...


As a result, the payment on various loans begins to take away from the buyer a significant share of current expenses. That is, a person has a refrigerator, an iPhone and a laptop, but he eats only pasta and cabbage ...


This is the same trap as in the situation with a credit card - that is, again, life is not through means, which at the beginning looks like the same notorious freebie!


And besides, consumer goods very quickly become morally obsolete, and accordingly become much cheaper. At the end of the year, in which you give full credit for the purchased laptop, there is usually a newer model for almost the same price, and the laptop for which you still continue to pay is cheaper.


To take such a loan in general is worth it, if the thing is really needed right now, but there is really no money for it.


And in any case, do not take on credit things-toys that you will not use for work or purely practical use, but merely being a blue dream, entertainment. ” If you get this thing within your means, then you will save for it and buy it, and you will not have to feel like a debtor all year, and if not, then you should better accumulate and not save money, but how can you return this evil loan? !



Car loan



Arguments for buying a car on credit are a car loan, they can be found almost immediately - a costly thing and many cannot pay for it, but I can't afford it.

Is it worth taking a car loan?

Is it worth taking a car loan?

Such loans are issued for a period of 5-7 years, and often directly in the car dealership. The average interest rate is usually about 9 percent, and it is not in rubles of course.


But the fact is that in total the buyer can sometimes overpay up to 60 percent of the cost of the car itself! Where does this amount come from?


The first auto insurance. It is necessary to issue it annually, and it costs 4-7% of the price of a car. Another 0.5 - 1% is the insurance of the life of the owner of the car. Plus fees to the pension fund (another three percent), register in the MREO, notarize a pledge and other primary formalities.


Well, besides, overpayment on the loan (the real amount given to the bank - for example, at a rate of 10 percent per annum for seven years, can accumulate approximately 50% more than the amount of the loan itself!) ... Also, do not forget about the first installment!


As a result, about 25% of the cost of the car must be paid immediately. Therefore, often the decision “whether to take a car loan” is immediately discarded due to an overly large initial payment!


There are a number of other arguments.Cars on average cheaper by 20 percent in three years. And if you have these 25 percent of the value of the car, which would be a down payment, you can put them in the bank at about 17 percent per annum, and gradually replenish this deposit. In the end, for 4-5 years is very realistic to save for the same car, while not overpaying as much as 60 percent of its value!


Everyone says: you do not need to take a car on credit! This should be done if the car is needed right now.






This means a long-term loan to buy real estate. And the percentage is quite high (in Ukraine - about 25%, in Russia - about 12%), the term can be very long (up to 30 years), and the sums are large.


A pledge is necessary (and often people who dream of their own housing, even if on credit, have something equal in price to this housing - for example, other real estate?).


And besides, most banks insist on paying a down payment reaching 50%!

But the truth is, a number of banks can provide less harsh conditions for young families, but mortgages still remain a heavy financial burden for the middle class of our society.


For this reason, not all are decided on a mortgage. As it does not seem strange, but often it is cheaper simply to rent an apartment of the same area than paying a mortgage! And besides, you can not ignore the risk that you will not be able to pay ...


Therefore, the economically correct answer in this situation is the following: you should not take a mortgage loan. But economically correct - does not mean at all that absolutely correct! Why?


  • First of all, their own, and not rented housing, implies a completely different quality of life. His - it is his, albeit with an overpayment.
  • Secondly, for some families, mortgage, even on such "draconian" conditions, is almost the only chance to get this same housing (not to accumulate this amount for decades to finally make a purchase, but already being a pensioner).
Should I take a mortgage?

Should I take a mortgage?

For this reason, we will not discourage you completely from the mortgage loan - you just need to carefully weigh your pros and cons!



Business Development Loan



This type of loan are unsecured and secured. The term of such a loan is up to ten years.The interest rate is about 12 percent in dollars.


If you have your own business plan (the bank may require it), you really understand when your business starts to generate income, if you are aware of the possible risks, then such a loan is worth taking. But if you dream about something, and you think that you will start to act, and then study the market when you get the money, then you should not risk it!


In general, this applies to any type of loans - the more accurately you understand why you need it, you better decide: should you take a loan, or is it better to wait and dig? You can also read the article how to find the initial capital on our website.


And here the least listen to any advertising - in advertising you, of course, will say that it is worth taking a loan!

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