Obviously, not having to borrow for investment is always better, we know that. Because a loan must be repaid-with interest. But with certain (unexpected) expenses there is sometimes no choice. After all, not everyone has the savings to be able to pay for a car, a new washing machine or study immediately. Then a loan can offer a solution, certainly with the current historically low-interest rates from 3.9% with a Personal Loan.
In itself, there is nothing wrong with taking out a loan, as long as you can bear the costs. But for what purposes is it smart to borrow? As a guideline, you can maintain that when the loan is used as an investment – in yourself, in necessary goods or in something you depend on to earn your salary – a loan is certainly a useful idea.
Borrow money for car, motorcycle or e-bike
For many people, a car, a motorcycle or an e-bike is absolutely indispensable for getting to work. When such a necessary means of transport suddenly stops or is in a wrinkle, many people often do not have enough money to buy a new one.
First look for alternatives: are you really unable to go to work by bicycle or public transport? Is an occasion or a shared car perhaps a solution? If not, there is no alternative but to opt for a car or motorcycle loan: without reliable means of transport, you have no income.
Incidentally, borrowing money from a bank/lender is often more beneficial than a loan from the car dealer.
Borrow money for home improvement
This is definitely a good investment!
With the current tight housing market, it is often not possible to relocate. That is why many people renovate or make their own homes with a loan. With this, you not only increase your own enjoyment of living, but your home will also be worth more and you will help the environment.
Transferring loans to a cheaper loan
This is also an excellent idea. Do you have multiple loans with a high-interest rate? Then transfer to a well-arranged Personal Loan with a historically low-interest rate and better conditions is the best investment in your future that you can do. You repay your old debts in one go and you are debt-free again sooner.
Borrow money for a boat or caravan
We now come to the ‘pleasure loans’ category. After all, not every loan has to be for necessary expenses. Investing in yourself can also mean investing in fun, freedom, adventure and developing yourself that way.
With a loan for a boat, caravan or motorcycle, make sure that it is still in your possession after the loan has been repaid. After all, nobody wants to pay for a boat or motor that has long since become obsolete or even resold.
Take out a loan for study
Taking out a loan for a study can definitely be a good investment. By better qualifying yourself and choosing a good education you can eventually get a job with a better salary and more career opportunities.
Almost everyone nowadays borrows for his or her studies. The cheapest place to do that is at the Education Executive Agency (DUO). But if you want to retrain yourself at a later age, it is usually not possible to borrow from DUO. Then you can take out a loan with a lender. Of course, it is also possible in this way to borrow for the training of your children: a great investment in their future.
In all cases, it goes without saying that you must properly determine whether the study program will really help you further in your career and whether you cannot raise the amount by saving.
Borrow money for a driver’s license
You quickly lose a few thousand dollars to get a driver’s license. If you need to be able to drive a car for work, borrowing money for a driver’s license is a good idea. For example, to come to work or to visit customers. You increase your chances of finding a job with a driver’s license and you will always be able to get where you want independently. You also have a driver’s license for life, making it one of the best investments in yourself ever.
Borrow money for household appliances
Borrowing money for household appliances is perhaps a little doubtful. A loan can still be justified for a washing machine that breaks. A washing machine with an A +++ energy class costs around 500 dollars and in the long term is often a better investment than a much cheaper second-hand washing machine.
But some household appliances are actually unnecessary: why would you buy a tumble dryer if you can hang the laundry? And are a bread maker, the latest gadgets or a Weber outdoor kitchen really necessary?
In any case, be careful when purchasing on-demand household appliances: an ordinary loan is always cheaper.
Borrow money for a trip around the world
Many young people take a gap year before the study or work starts. The reasons for this can go in all directions: getting away from the parental home, going on an adventure before the ‘serious life’ begins, looking for yourself and then making good choices …
Such an interim year with a world trip is often a great way to learn to be stronger, more independent. Do you expect to be able to earn back the amount easily after the trip around the world and have you thought carefully about the financial consequences? Then the first step to wise money borrowing is already taken.
People over 30 also increasingly take a sabbatical. Why wait until retirement to make beautiful journeys and see something of the world? It appears that people who take a sabbatical every 7-15 years are more motivated in their work and can orient themselves much better on further career opportunities.
It is not without reason that 85% of all Dutch people dream of a sabbatical. An excellent investment in yourself and in your career! A loan for a holiday/sabbatical/world trip can certainly pay off in a richer existence (literally or figuratively), provided that you plan well and you can bear the financial obligations of a loan.
What to look out for if you want to borrow money
If you take out a loan to invest in yourself or a physical product, it is important to make a good comparison first. Which loan offers the lowest interest rates? Are closing costs, consultancy costs or cancellation costs charged? And what better fits your situation: a personal loan or a revolving credit?