It’s commonplace for many people to use bank loans as a solution. Various needs or requirements that require large funds can be resolved loan funds.
For example, you want to buy a house. Because of insufficient funds, you are undoing the intention to own a house. Another story if you apply for a mortgage or mortgage to the bank. The house of your dreams can be bought with these bank loan funds.
That’s why this bank loan doesn’t change like a helper when it’s needed. As long as the installments are always paid according to the time, this banking product will not be a problem in your finances.
However, there are several conditions where a bank loan actually makes you lose. Such as using loans to do these things. Anything? Let’s look at the following review.
Submit a bank loan for consumptive purposes
Bank loans are very beneficial if used for productive purposes. Good Finance is very beneficial if used for purposes that are productive. However, it turns out that the use of loans is not always the case.
Apparently not a few people apply for loans to meet consumptive needs. Here is a mistake in looking at the role of loans.
Using loan funds for consumptive purposes is not at all profitable. Conversely, using loans for productive purposes or asset purchases will provide more benefits in the future. For example, just buy a house or open a business.
Pay debt using bank loans
Don’t pay debts from loan funds. If this one thing, it’s all the more than wrong. Take advantage of bank loans to pay debts just lie. You just try to avoid one hole, but instead, fall into another hole.
Some say paying debts using bank loans is not a problem when being squeezed because they are billed for paying a debt. It is true that this can pay off other debts. However, this has only a temporary effect.
After that, you will be billed to pay a new debt. And without realizing you take another loan to pay the bank installments. If this is the story, you are in a circle of debt and it is difficult to escape.
Invest with loan funds
It’s actually possible. But the risk is a fairly high investment with loan funds. Oh yes. The investment referred to here is an investment in the capital market by placing stock instruments.
As you already know, the investment in shares is fortunately large, but the risks that must be borne are also great. Because by investing in shares, it means you are ready to lose funds if at any time a price decrease.
You can imagine, what would happen if you invest with loan funds? When you lose, you don’t just mess around with the loss of some investment funds, but also think about the installments that you have to pay to the bank.
Where to try to pay the installments if your investment does not generate profits? This is why investing with borrowed funds is not recommended.
Take a loan not according to its designation
Buying a motorcycle with Good Credit actually burdens you to pay the installments.
Although bank loans have been divided based on their designation, there are those who take loans that do not follow these conditions. For example, just take credit without collateral or Good Credit to buy a motorcycle.
Of course, this is already mistaken. Buying a motorcycle with Good Credit actually burdens you to pay the installments. Because in terms of interest is clearly already much different. Interest in motorcycle loan installments is clearly lighter than Good Credit interest.
Do you understand now things that can’t be done with bank loans? As explained above, loan funds are very useful when used for productive things.
For example, you open a business with a bank loan. The benefits gained besides being able to enter your pocket can also be used for debt repayment payments.