Many Danes have some form of savings. After all, when there is an unforeseen expense that the everyday economy cannot bear, the money must be found somewhere. Maybe you hadn’t just worn and dragged on for years to get a dent on the car or to buy a new stove. A savings you usually want to spend on something fun like travel and experiences. The question then is just whether you can avoid using the savings if you take out a loan. Or rather, if you can afford to borrow money instead of taking out the savings. With the right considerations, you can quickly find the arguments for and against and thus find out what weighs most.
Surely the cheapest will be to take the money from the savings
It’s money you already have and you don’t have to pay interest and fees on that money, just like you do with a loan. This is not to be avoided, no matter what loan you want to take. If you take out an online loan such as a quick loan or consumer loan, which is the easy choice to cover small expenses, both the interest rate and the fees can be high and your loan will therefore be an additional expense that will follow you for a longer period.
If you have room in your monthly budget to repay a loan
Your choice may not be of the utmost importance, except that you save some money by using the savings, which is worth taking. The cheapest solution will probably always be preferred, no matter how much in financial surplus one is. On the other hand, if you have a savings and want to borrow money, but can’t quite afford to repay this loan through your budget account, you probably need to start saving anyway. As a result, your loan may end up saving more on your savings than the expense would have if you had used the savings to pay for the repair or replacement of what has now been broken and needs to be fixed.
Generally, a loan should be somewhat near the last resort as it puts you in debt for a period of time and the risk that something unexpected will make it difficult for you to pay your loan back in due time is present. It is not a sin to borrow money, but if you have a savings large enough to pay for the expense, this is both the easiest and cheapest solution, no matter how you turn and turn it. While it’s always fun to spend your savings on some fat, savings are also good for covering unexpected charges or turning in a period of money shortages. If you do not have a savings standing, it is almost always possible to borrow money one way or the other, so you do not have to completely drop a car because the air conditioner is broken or start washing clothes by hand because the washing machine is off.