Getting a Personal Loan to Buy Assets

[Mika]

You can get a personal loan for various purposes, however, you should never try to use your loan money to buy things other than assets. Asset means something that will grow its value over time. Assets mean something that can give you profits.

You get a personal loan and use the loan to buy real estate properties. Real estate properties are assets. Their value will increase over time. You can buy gold, which is also an asset because gold will gain price over time.

You get a personal loan to buy a car, a car is not an asset as its value will depreciate over time, furthermore, you will have to spend money to maintain the car. However, if you get a car and use the car to drive for uber, it will be an asset because it will give you an income.

You can use a personal loan for education because education is also an asset that will give dividends in the future.

 

[Jasmine]

Loan can be used to buy assets or invest. When you are buying assets you need to take care of a lot of things, for example, whether you are gaining any returns on your assets or not, how much interest you will be paying on your loan and how much returns you will be receiving from your assets, etc. For a lot of people buying a house through a bank loan is the ideal way to become a home owner. If you are buying a home for yourself, you will save money on rents, but you will also pay loan regularly. As a home owner you will also have other financial obligations like insurance, tax, etc. Therefore, you need to do serious calculations whether it is profitable to remain in a rented home or buy a home through a loan. However, if you can rent it out, you will be on profitable side.