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Loan: A Double-Edged Sword

All people do loan from time to time to ease up their financial needs. Loaning is a great means of obtaining money when you can’t earn such amount right away and be paid back within a certain period with the inclusion of interest.  It can help you if you are in dire needs of a fund for your plans or activities.

But loan can also backfire which is quite a problematic.  The main reason is that people are not all financially literate. Hence, most of them do not use their loan in a smart way and instead waste their resources on non-priority things.

The Dumb Way to Use Money

Well with the advancement of our technology, who can we blame for those attractive, shiny and cool gadgets being manufactured by those giant electronic companies that burn off our money? They produce almost new products every year with amazing features and functionality. However awesome those gadgets, the steeper the prices are.

The problem with most people, they want to be trendy instead of thinking of how functionality will help them in their daily lives. It often results in the majority of the population buying the brand new gadget every release and allocate a large chunk of their savings to it. Even though their current gadgets are still working fine and can still function for daily needs. By allocating a large amount for that gadget, money supposed to be for other daily and important expenses are not being paid properly. Hence, most of them will avail a loan to live on the month or just to afford those kinds of gadgets.

The Smart Way to Use Money

A loan should not be used to acquire things that are not necessary or just to indulge your self-pleasing activities and wants. Loans should be used in a strategic way to secure to ease up your current financial needs and remember, you have an obligation to pay the loan amount in a certain period of time including the interest.

The usual cases that people loan for are acquiring essentials in life. A great example of it is house loan, it is to finally avail a good permanent home for their family. Another one is a car loan specifically for those who in need for transport for their family or for their business purposes. There are also people who use their loan to pursue a higher education for themselves or to sustain a family member educational requirement.

 The Greatest Way to Use Money

Like any ordinary person, the monthly salary is almost used up just for monthly expenses like bills, food, entertainment and any other basic commodities.  Most will try to save up money as their savings and a contingency fund in case of an emergency. Hence, people can’t afford to risk their money in any other aspect of investment since they are already choked at their current financial situation.

Hence, their mindset is that if it will fail they will be in a financial ruin. They are afraid that allocating a large amount of money will put them in deficit and worse, be forced to use their savings. Which is why loaning is best utilizing to start-up your own personal business.

There are lots of loans offers with flexible duration being service by the local banks. All you have to is to find the best deal out there that will help you a secure a good credit line and a sound investment. There are also available comparison websites like GoBear,, IMoney, and others. They have those loan calculators, helpful articles and experts that will assist you to find the best and suitable loan offer for you.

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David King – who has written posts on Advertise Your Discover.