However, a January break does not mean that the race has run. There is plenty of time to think about your financial priorities and goals for the next 11 months.
For some, the goals may be of a more modest and short-term nature, such as saving up for a long-awaited trip, a new couch or an upgraded TV. For others, the financial goal may be of a longer-term nature and involve some form of capital injection – not infrequently in the form of a loan.
Whether to take out a loan or not
The conditions for this is one of the most important financial decisions in life and nothing should be taken lightly. Before taking a loan, one should therefore make careful considerations and predict the probability of a certain outcome through calculations and forecasts.
In this way, the loan market can be compared to the blackjack world where the probability of a particular outcome depends on a number of factors and where different calculations can help calculate the odds for a particular hand or the probability of a profitable result.
Taking a loan does not just mean comparing different loan providers and calculating interest rates and repayments. The single most important step in the process that results in a loan is the knowledge, or at least the hopeful conviction, that the loan will not only be repayable on time but also contribute to a concrete improvement in your life. In short, it can be considered justified to take out a loan when the purpose of the loan can be assumed to be fulfilled within a reasonable time and even give some kind of profit.
What short-term and long-term investments are worth borrowing
For in light of what has been mentioned earlier? One of the most common and popular loan forms is student loans – that is, a loan to finance college or university studies. According to statistics from CSN, 70% of all students with study funding choose to take student loans. A loan that makes it possible to advance in one or more subject areas for a few years later to enter the labor market with better conditions is seen in almost all circumstances as a sensible financial decision. The exception is, of course, if the prospects for jobs are small for the specific education or if the loan is taken to finance expensive foreign studies that take longer to pay back.
Another valid loan purpose is met by someone who has a good business idea and who wants to take the step fully and start his own but who needs a capital injection to realize his idea. In these cases, any misgivings about the loan itself should be preceded by calculations, market research and mapping of target groups to find out if the business concept is long-term and can generate profits in the future.
Only if the answer to the above question is yes is a loan justified
Nobody’s dream is worth more than anyone else’s, but the difference between a successful start-up company and one that ends up at Good Finance’s desk is not often a lack of research, reality and market knowledge.
Finally, a loan can be considered justified to fulfill any type of essential need, such as providing a roof over the head in the form of a home purchase. Of course, for those who are looking for flexibility, the rental market is still an alternative. However, in many major cities around Sweden, good housing is lacking with attractive locations in the rental market. Here, a home loan can mean the ultimate difference between thriving and being in your home or spending hours or just minutes to get to your job on a daily basis.