 Whether You SHould Take Out Your First Loan
The big day has arrived, and your future is about to commence. You are eighteen and going to college, leaving your parents. You are a college graduate with a fiancée looking for a house. You’re a father looking to provide a young son with a car. Then you check your savings account…and find emptiness. If this is you, then do not despair because the modern economy has provided options for you. Now is the time to consider applying for a personal loan.
Taking out a loan is a big decision, and one not to take lightly. The first step in accessing the rationality of taking a loan is to ask yourself what you need, and why you need it. While this might seem a mundane, even trivial task to do, it is vital because loans with high interest are one of many factors that cause people today to declare bankruptcy. Your financial future is yours, and only you can take care of it the best. So ask yourself what you will need the loan money for, because there are big differences between taking a loan for pure commodity items like a TV, which you don’t need, and a car, which you will certainly need to drive to work.
If you are taking out a loan to buy a big ticket item that might contribute to paying itself off later, such as a car that can take you to work, or a house you can sell later, consider such an item as a necessity item you need, rather than what you want. A house can appreciate in value, and furthermore if you are married with kids, an apartment will get awfully small very fast. On the other hand, being single and then taking a home mortgage loan will be on par with purchasing a pure vanity item such as a TV because honestly, someone who is single can and should tolerate renting an apartment without the burden of a loan to do so. No good comes from needless debts. If what you need the loan for is not something that can in some direct or indirect way help you pay off that loan in the future, seriously consider avoiding the loan altogether.
Why should you be worried about the item you are taking the loan for? Because even though, say, taking the loan for a road worthy car might not seem like something that’ll pay for itself, it can in subtle ways over time. If you need the car to go to work, and if you have the intentions on being a stellar employee, then the car is contributing to helping you sustain your income. You need income to pay interest. The car might be worth the buy, if you are wise in choosing the car. The same applies to any number of things, such as student loans. If the education you received helped you get into, and then ace, medical school, you can be sure with a doctor’s salary that you can pay off the loan and then some.
The right time to get a loan then is when these factors add up. Will you have the ability in the long term to pay interest, and do you have any possible or foreseeable risks that might jeopardize you on that path? If your parents are old and frail, their health is probably likely to fail soon. Try to hold off getting the loan, and plan on getting health coverage for the parents instead. But getting the loan and then coverage will lead to sever difficulties in meeting all your obligations.
You are your best judge in knowing the right time to take a personal loan, but always remember loans are still a business enterprise, because profits come from interest. You are signing an obligation to pay those interests. Do your best to make sure you can hold up your end of the bargain, other wise your future will be jeopardized.  | 
21st August 2008, 12:12 PM
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