How do you make decision to take a loan . At what stage to you think that taking a loan is better option than anything else ?

Of course you have to consider first the amount that your pocket can easily paid up for your loan.  Taking a loan is my last choice if I feel I really out of cash that is badly needed for my family needs.

A low interest loan to cover a credit card might be acceptable, as long as the person is disciplined enough to not take out another credit card!

Beyond that, I think loans should be for emergencies only.

etali wrote:

A low interest loan to cover a credit card might be acceptable, as long as the person is disciplined enough to not take out another credit card!

Beyond that, I think loans should be for emergencies only.

Your so correct.  The key word is disciplined.  My sister just took out a Home Equity loan.  Hopefully she will not get any new credit cards or reuse the ones that will now have a zero balance.

It's never a "good time" to take out a loan -- lenders love people like you; especially when they can charge any interest rate they want, based on numerous things ... so, why pay twice to three times more for something than it's worth, just because it's easy?

Same reason I don't rent to buy anything.

I took a loan when i went to school as well as when I bought a house. Those are the only two loan i took out. I bought all my cars with money. I think loans shoul be taken out on big things that are going to have a valuable use to you.

I really try to avoid loans at all costs.  In my experience people spend more money when they take out a loan.  We save up cash and find ways to save money on things we need.

Lori

In my opinion, a loan with better terms used to pay off another loan OR a loan that is for an true emergency, are the only loans to consider.  If I had followed my own advice, our debt would not be this bad.

I really try to avoid long term loans like the plague.  I don't think there is ever a "good time" to take out a long term loan.  I don't think I would even take out a loan to buy a house anymore with the way the housing market seems to be going these days.

The only "exception" in my mind MIGHT be a small business loan to start a business.  I would want to make sure as much as possible that I could pay off that small business loan in as little time as possible.  A business is something that can potentially appreciate in value over time with hard work and dedication.  That's why I would consider a loan to help with start-up costs as an "exception."