Loans may be a way out of a financial situation but is it always the best option? Here are some advantages and disadvantages of loans:
Advantages of Loans:
- Money at your disposal to use where you see fit
- Easy repayments that you can manage
- No more sleepless nights on how you can fund your tuition
- Freedom of choice on repayment term, type of loan and the financial institution
- Quick approvals and pay-outs are made within 24 hours
- Repayment only starts the month after you were funded
Disadvantages of Loans:
- Loan repayments does not have a fixed interest rate for the entire duration of your loan term
- There are penalties for paying off your debt before the scheduled time.
- If you miss a payment, interest will be charges on that and it will reflect badly on your credit record
- You will still be paying off a loan long after it has served its purpose.
- Bad repayments or no repayment of the loan will lead to legal action taken against you
- Secured Loans that have your home, vehicle or other capital as collateral can lead to the auctioning of those possessions to pay back the loan if you are not able to do so anymore.