SELaplana >> Finance >> Cash not Loan, the Best Idea

Few of you (our blog readers) disagreed on what I told you before that getting a loan is not the good idea in acquiring an appliance or anything from the stores. One of you even argued that loan is not at all times bad especially if you are capable of paying your debt. But I know that you already knew that it’s not just my opinion. It is also supported by the teachings of God written in the Holy Bible as discussed by the Pasugo-God’s Message article embedded on our post, “Owe no man anything.”

You might have points, but I still found the debt as burden that should be avoided so that our focus can be directed to other important sides or needs of our family.

Let’s take another example to prove that it’s better to pay cash than getting a loan.

The NEO laptop that I bought last month is just a low-end laptop and it cost me PhP34,000.00 to acquire it in cash. Now if I’ll take it in loan, the store require me to pay PhP10,000.00 as down payment and I need to pay them PhP5,300.00 for 6 months or PhP3,500.00 for 12 months.

If I’ll take the 6 months loan, I will spend in total PhP41,800.00. And I will be spending in total PhP52,000.00 if it is in 12 months loan. Now, consider the difference and you’ll see that paying it in cash is better than taking it in loan.

Deposit your money in bank

There was one of you argued that it will be better to take an item in loan, because you can pay the downpayment and the rest of your money will be deposited in your bank account. But do you think the interest you’ll earn from your bank account is much higher than the interest imposed in your loan? I don’t think so.

Zero Percent Interest

Okay. I know that there are stores that offer a one year or 12 months loan with zero interest (0%). I am not really familiar on how the stores planned this kind of scheme. But what I am sure is that no businessmen that would allow their stores to lose even just few hundreds of Pesos.

For example: Last August 2007 at the Gaisano Metro mall, the JVC offered a zero percent interest if you’d get their appliance in 1 year loan. But there’s a condition of it, you need to pay it by credit card. Now, do you think you are not paying interest with this kind of scheme? Well, I know what you’re answer to this question.

You’re still a loser

Now, let’s consider that there’re stores that offer zero percent (0%) interest on the loan you take and you are not required to pay it by credit card. But then on your 6th month onwards, you failed to pay your monthly fees. Do you think you gained from the money you paid for your loan?

Businessmen need gains not losses.

I just want to remind you that no businessmen who want to lose from their business. If they offer anything for loan, then their making it for sure to gain from it. And you should notice it too that items for loan have always higher prices compared to items for cash. You’ll not spot the difference immediately by just looking at the price tags. You need to investigate and find the difference of prices of items offered for loan and that of items for cash.

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Tags: Cash, Credit, Credit Cards, Loan
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