Why it is better to save up for a project than take a loan.

[Etini Willie]

I think it is cheaper and more satisfying if you save up for any project or any purchase you want to make than to get a loan for it. It is easier for us to want something and get a loan to purchase that thing right away than saving up patiently to get that thing. I believe that is impulse buying. Unless it is an emergency, don't take loan to fix it. Have you realized that you are going to be paying interest on a loan every month? If you take the principal and the interest as your cost of getting that item, then you know you have ripped yourself off and overpaid.

Can we even talk about the inner peace you enjoy when using an item and you know you are not owning anyone for that item? What is the easence of buying a phone that anytime you look at it, it reminds you of your financial liabilities. I live my life off pressure. When you take loans, you subscribe to pressure. Whereas you could save up, get that thing and know peace no matter how long it takes. I would rather save to get what I want than take a loan to get it.

 

[Knowlopedia]

There are a few reasons why it is generally better to save up for a project than to take out a loan. First, when you take out a loan, you have to pay interest on the money you borrow. This can add a significant amount to the cost of your project. Second, if you are not able to repay the loan, you could end up losing your home or other assets that you put up as collateral. Finally, if you are able to save up the money for your project, you will have a sense of pride and accomplishment that you may not feel if you had to borrow the money.

 

[Augusta]

For me it is better to always stay away from anything loan if one can help it because it doesn't make any economic sense to have a loan that comes with a high-interest you have to pay back the loan and interest so apart from the loan being for a very profitable investment I don't think it has made any sense to be getting loans.

I can understand with a business person trying to expand the business this is what good because you make more profit so as I said your peace of mind is number one so you try to keep the loans and use your savings

 

[moonchild]

Staying from a loan might seem like the logical thing to do, but depending on the circumstance, for example if you have kickstarted the project already, then taking a loan is a very good chess move to grow the project, if you are planning to get into a business you should not be afraid of taking loans, if you have a solid plan of growing the business, then you should go ahead and take the loan.

But if you just tested for demand and it doe not look all that promising then yo are better off using your saved money, because if it all go bananas, you won't be worried about how to pay the loan, you will be strategizing on how to come back stronger.

Altogether I think savings gives you more confidence to take risks if you are just starting out, so it all depends on perspective and circumstance at hand.

 

[niche]

If you are not very confident of being successful it is better to use the savings available for the project and reduce the expenses based on the funds available. Most banks will not give a loan to a person who does not have a track record, cannot provide proof of income. It is also very time consuming to complete all the paperwork required to get a loan, visit the bank several times to get the loan sanctioned. Well established businesses may get loans if they are confident of making a profit.