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The Loan Bazaar- Giving smiles or tears?

Posted in Finance Articles, Total Reads: 4402 , Published on August 29, 2011

With the advent of loan facility all around, and getting lured by the continuous & tempting ads offering loans for a dream-house, a car and the like, for how long can one resist? Such lucrative offers make their dreams bigger and bigger each day. They grab the opportunity without thinking of the consequences and finally end-up paying EMIs through their nose. To fulfill their dreams, people rush to bigger towns and cities, where they can earn more. However, on the contrary, they deprive themselves of the peace of mind and pleasure of staying in a quiet, small town where their dreams too can be fulfilled.



In the present day situation, where things are getting expensive every day, people should respect the value of money and loans should be taken only when it is extremely necessary and unavoidable. In fact, the best can be if the loan avoided and one must try to first use one’s own resources or investments before thinking of taking a loan.

As it is, a simple middle class family with a limited salary or income, finds it difficult to live comfortably in a big town with so much inflation and price rise. When over burdened by EMI’s to repay various loans, which had been taken to actually give a smile to their family, many a times people take extreme steps, which instead gives them tears.

To avoid theft, gold is usually kept in the safe custody of bank-lockers. Instead, it is a good idea to take loan against such gold. Traditionally too, gold was mortgaged to money-lenders and after repayment of the entire interest and loan amount, the gold was returned back to the owner. One must first fix one’s priority as for what purpose the loan is required.  Home loans should be planned at an earlier part of the career as the loan amount is usually big and EMIs are smaller if paid over a longer period of time. Education loans for self (study for a break in career) or children may be taken later when required. Luxury items like buying a new car, TV, computer or for personal reasons may either be postponed or one must try to use one’s owns investments or resources for such items.

Planning should also be done for keeping enough money aside in case of any emergencies or contingencies. Urgent medical emergencies or other important events require immediate liquid cash, and thus it is essential to keep a certain amount for such disposals. Weddings, family holidays etc should also be considered as a part of the planning process as these too are important aspects of a person’s life.

At the end of the day, loans are extremely useful and helpful if taken properly and systematically. It gives the person an opportunity to explore and do things which might usually be beyond his reach, and were not available to the previous generations. Loans as a financial tool, surely reduces the burden and adds value & happiness to life.

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