LOANS: FRIEND OR FOE ?

February 13, 2017by piyush golani0
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It would be great if we have enough money to fund all our requirements but it’s not possible every time so one need to borrow funds from lenders. Loans look attractive but if they are not wisely understood than one can be trapped in its tricky life cycle. Due to financial emergency one opt for loan option but ideally do you really need loan?  Let’s check out the reason when one should look for loan:

1) When repayments are smooth

Temptation is good but don’t fall for burdensome end.Sometimes problem comes when repayment cycle comes to end so we have to be clear about the sources from where payments will be made. If sources are not defined than one can go for extra income like freelancing.

2) When essentiality is the pure reason

Lucrative thing are not meant for everybody. To live satisfied we have to find ours essentials, for example: Having a car is not necessity in a town but 2 wheeler may be. Just prioritize the list than make decisions.

3) When you have best options

Having good credit score gives you attractive low interest rate as it indicate the good repayment capacityof the borrower. But situation may be vice versa also i.e. if they are not repaid on time credit score will go down and benefits will also be snatched.

So make best out of special offers and schemes, For example: Offers for women, Housing benefits

4) Upcoming Income in future

If you are going on major purchase before money arrived than make sure that this strategy works best among the rest. You can take loan and repay it as soon as future income strikes bank’s account

Like huge commission or bonus which will come quarterly / year end.

5) Taking loan and doing investment

If you are planning for loan to invest it somewhere then always opt for more return percentage compared to interest rates on loans.

Let us analyze different loans when they are really fruitful:

 

RETAIL LOAN:

Retail loans help the individual to convert their dreams into reality may it be new house, child’s education, purchase of a new car or personal reasons. Let’s check out them:

Home Loan: Home is one of the essential element of life and every one of us want it so whether you want to purchase flat/tenement/row house or want to construct bungalow/tenement or repair/renovate flat/tenement or want to purchase plot then home loan is perfect choice.

Personal loan: The best part of these loans are they get instant approval with lower interest rate so whether its marriage, asset acquisition, debt consolidation, business, education or other reasons, personal loan are best.

Car Loan: Dreaming to get a new car/reimbursement of already purchased car or want funds for pre-owned car then go for car loan as you get them very quickly with less interest rates and simple documentation & conditions.

Education Loan: To fulfill the dream of parents who wish to educate their child may it be bachelor or master degree or professional courses like doctorate than this scheme is best.

Say for example: If you want purchase a house for Rs 30 lakh and got a loan of Rs 12 lakh on EMI of Rs 12000 and your monthly income is Rs 25000 + commission at month end than you can afford the repayments very smoothly but if your father owe a house than that’s not essentialityand to owe a car by your wife by availing special offers for women may be ontop priority. Apart from fix Income you can invest that commission amount by taking personal loan in schemes and deposits and repay as soon as your commission arrives.

 

BUSINESS LOAN:

Every entrepreneur needs best financial strategy for progress of its business. Either for opting personal loan he can go for corporate loan. Well you can need them in various scenarios:

Expansion: Small business loan are best when you are into expansion program of your business. Growth should not stop due to lack of funds. If you want funds without disturbing your operational fund then go for it.

Inventory: One of the largest expense in many industry is inventory. You need it before starting business and even after operating, the problem might come even during seasonal inventory. By taking loan you can be on top of what customer demand.

Cash flow: Short term loan is the best option for regular operational cost and keep business in flow even when profits are low. When money is in flow than you can attract new customers there by reducing losses and increasing profits.

Equipment: Loans help to manage high cost of equipment for better experience and to keep work continuously in progress. Unplanned expenses like repair and maintenance can hit the budget and faulty equipment’s can increase liability so manage them you can opt for loans.

Shorter loans: Initiate your borrowing with short term and repay as soon as possible so that your credit history improves and in future when you opt for long term loans you get attractive interest rate and schemes.

Consider the borrowings as your assets and try to make out the best among them so that your budget don’t breaks. Future scenario with loan amount looks attractive but sometimes patience leads to more fruitful results so always analyze the cost and benefits of loan taken then move forward towards your decision but if higher potentials are seen to increase the revenue of business or manage your finance and are must for essential needs then it is the perfect time to look at loan opportunities, just Go and Grab it.


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