Is cash advance a good thing or a bad thing? If you’ve pored over financial blogs we’re sure you’ve read about borrowing money and why financial experts dissuade you from going into debt. While it’s true that being in debt is not ideal, it’s also not that bad. In fact, thousands of businesses thrived well after they’ve borrowed money. As they say, when you borrow the money you are borrowing from your future self.
Borrowing money isn’t bad if you are in dire need of it just as long as you find means to repay your debt. Check out the following scenarios where people are forced to borrow money and why it’s okay to do so.
#1 Paying for Medical Bills
Nobody wants to get sick or get into accidents but life is full of surprises. You can’t always predict the future. Two things you have little control over are getting sick due to heredity and getting into accidents.
Ideally, you should have prepared an emergency fund to pay for your medical bills as these can easily skyrocket in just a few days but if your salary is enough to support your day-to-day expenses then it would be a good idea to borrow money from credible institutions to pay for your labs, medicines, or surgeries.
If your health and safety depend on it, go ahead and borrow money. Today’s credit bureaus allow up to one hundred and eighty days to deal with your medical bills before they get reflected on your credit report.
#2 Paying for Moving Costs
Another reason why people borrow money is when they are moving to a different place. Moving to a new place may seem exciting but if you start calculating the costs of transportation, storage, boxes, and paying for professional movers you’ll be shocked to see how much you’ll need to spend just to move to a different location. The rates can even go high up if you are moving interstate. You’re looking into thousands of dollars.
Applying for a personal loan can easily cover this hefty expense plus you’ll be saving more money compared to charging it to your credit card. What’s so bad about credit cards? Well, take a look at the interest rate. Personal loans have a lower interest rate compared to credit cards.
If you don’t believe us, check your last credit card statement and compute the interest rate. Most banks charge you a fifteen percent interest rate, sometimes higher.
#3 Trying to Save but Living in Debt
Trying to save money while being in debt is a lost cause. According to a study published online, in a list of savings account the best offer was a 1.10% APR. Try to compare that with your credit card debts that have an average of fifteen percent and you’ll see why getting a personal loan is better. We suggest you pay off your debt using money from your personal loan. Focus on paying your debit first in a year and then the rest of the money you can use to save or invest.
#4 Home Improvements But Not Enough Equity
Equity is the current value of your home minus the amount of your mortgage. For example, if your home costs $200,000 and you owed $180,000 you have $20,000 worth of equity. Getting a home equity loan is a much better option to finance your home improvement project as these enhancements increase the value of your home.
As you can see, borrowing money is not as bad as others say it is. Being in debt isn’t always a bad thing as long as you can pay your debt off. With the low-interest rates, we couldn’t see why you shouldn’t apply for a personal loan considering these situations.