Self-financing or loan financing – the age-old battle of whether to use our funds to finance our ventures or to get loans for them has been around for a long time. At MoneyShop, we have extensive experience in the world of finance, and we can help address this question.
Benefits of Financing With Savings
There’s no debt involved
If it’s your own money, you don’t owe anyone.
Poor credit history doesn't matter
Getting loans with a poor credit history can be challenging. However, you don’t need to submit any proof of good credit to use your own savings.
Disadvantages of Using Savings
You have very limited funds
You can only spend as much as you save. Ultimately, you’ll still have to resort to external financing to procure the funds you need for your task.
It can be time-consuming to save up
Once your savings are over, you’ll need to start from scratch to secure your future. This can take a very long time to do.
It may put your entire future at risk
If you have a family or the closer you are to retirement, the risks that arise out of spending your savings, increase.
Benefits of Taking Loans
You get the money immediately
Unlike with savings, with loans, you can get instantaneous access to large amounts of cash.
There is no cap for the amount you can borrow
Savings can be restrictive to the amount you've actually saved. But with external financing, you can borrow as much or as little as you want. Take the example of MoneyShop's QuicFix Loans. You can get a loan of as low as $500 within minutes.
Loan-repayment terms have become extremely flexible
Loans these days don't revolve around high interests and extended repayment periods. They can be customized to suit your requirements.
Disadvantages of Taking Loans
Interest rates can be high
In certain cases, the interests you need to pay for your loan can be quite high, making loans a costly affair.
Poor credit may restrict your loan taking ability
Loan providers check your credit history to see whether you are a good candidate for the loan. A poor credit history can diminish the extent of the loan you applied for.
Why Are Loans Better Than Savings?
A look at the above points shows how loans add higher value to spending compared to savings. At the end of the day, savings are meant for rainy days and loans are meant for the sunny ones. At MoneyShop we can help you make an informed decision. Contact us today.