Personal loan or savings?

Personal loan or savings?

23 May 2008

When planning the purchase of a boat or organising a holiday, is it better to wait and save until you can afford the cost, or is it preferable to use a personal loan to have what you want now and pay later? This mostly depends on the kind of person you are and how you manage your finances, but there are certain signs that suggest which is a better option for you.

If you can reliably stick to a budget without encouragement, then savings may be a better option for you. High interest means you should be able to save enough faster than you would repay a personal loan, but you may also be prone to budget for a lower cost and poorer quality option in order to get what you want faster. The trick is to be focused on a goal. If you find it difficult to motivate yourself, then saving for something specific may not be suitable for you.

Those who prefer to act now and who struggle to manage their finances unless an external factor forces them to will probably better off using a personal loan to buy now rather than save. In this way, you will already be committed, and as long as you are not susceptible to debt, this can stop you from spending money you intend to go towards your holiday or boat by earmarking it beforehand.

Please visit our dedicated page to apply online for an excellent personal loan.

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