Would you take out one loan to pay another loan?
@TheInvisibleMan (17594)
October 10, 2017 1:51pm CST
That was the question that one of my friends asked me when we talked about changes in the financial market.
I replied that I would never do it because it was like running from a snowball that would eventually hit me sometime.
What would be your answer to that?
2 people like this
5 responses
@owlwings (43897)
• Cambridge, England
10 Oct 17
Sometimes it is a good idea to take out a loan to pay off or consolidate several other smaller loans. There are a number of situations when it can be useful. Two typical examples would be:
1) When the new loan has a lower interest rate than the existing loan or when the monthly repayments are lower (even though over a longer period with an ultimately higher cost) and will bring your monthly outgoings in line with your income.
2) When it will make it simpler for your budget plan to consolidate a number of small repayments to different companies on different dates into one regular payment to one company
Of course, no loan is a good idea if you cannot afford the repayments and strict and realistic budgeting is always essential when you are considering a loan for whatever reason!
1 person likes this
@RasmaSandra (98033)
• Daytona Beach, Florida
10 Oct 17
No problem here I have no money to even consider getting a loan. I need to make money big time and no idea how to do it.
1 person likes this
@lovebuglena (52174)
• Staten Island, New York
19 Feb 18
I don't think I would ever take out a loan, unless I knew I would be able to pay it all back right away. I hate being in debt and owing someone money. But taking out a loan to pay off another loan makes sense if you can reduce the interest you pay on that loan. Someone I know did that. He took out a loan to pay off another loan. And now he is paying less in interest.
