Get Your Money’s Worth: Advice on Maximizing Loans

Taking out a loan is an essential part of life nowadays with high prices and increasing demand on people’s income. Many people think of loans as big burdens. However, if you are smart about it, you can turn these loans to your advantage.   Here are some tips on maximizing the value of your loan, whether it is a mortgage or a student loan.


For those seeking to buy a house, a mortgage is usually the best possible choice without needing to save up for years. Mortgages are also supposed to be for the long-term. Your trusted mortgage lender doesn’t expect you to pay your mortgage in a short time. It can be a good idea to choose a long-term loan. A 30-year mortgage only sounds difficult to pay.

But it means lower monthly payments. Yes, it will result in you paying a higher amount of interest. But in those three decades, you can expect increased income and windfalls. Negotiate no penalties for early payment and you can likely pay off your mortgage a decade early.

Student Loan

It is now common for a lot of young people to borrow money for their college education. Student loans promise them the ability to pay for a top-notch education but it can be a mistake to immediately get one. To get a good value for your loan, you should calculate the return-on-investment that you will get from it.

Your potential salary should easily cover the loan after you graduate. For example, your degree will cost you $200,000 over four years. This includes everything from tuition to school expenses. After you graduate, you should be earning at least a quarter or half that amount to reasonably pay the loan.

It is a better investment if you take a more affordable course at a local college for $40,000 then you start earning $50,000 a year. This allows you to comfortably pay off the loan with some money left over.

Personal Loan

A personal loan is an interesting loan product because it can be used for anything. For example, you might need to buy a new computer and you don’t have a credit card or are short on cash. This can be a smarter choice. The average credit card interest rate is set at around 16 percent,

That is a pretty high rate. If you are smart, you can shop around for a personal loan that has a five percent interest rate. As long as you pay it on time, you won’t rack up any extra fees and should come out as a winner. This can be a great solution to pay off any existing debt that you have.

Car Loan

Cars are the second-biggest purchase a person can make. Car loans are there to help with the financial burden of the purchase. But they can also be pretty risky. Automobiles quickly drop in value once you use them. Even if you sell your car quickly to try to pay off the loan, you likely won’t have enough money.

The best tactic to deal with this is to pay off the loan as quickly as possible. This ensures that you completely own the car in a short time. It will still drop in value but you won’t owe a lender for using it.

Business Loan

Business loans are the fuel for a lot of start-ups out there. While it can be risky, your business might need a quick financial boost to ensure that it becomes a success. When you do get a business loan, there are several things that you can do with it that will be a net positive for your business. One is to buy supplies in bulk. This is a great move for retailers who move inventory quickly. Bulk purchases of products to sell can mean a quick turnaround on your investment. You can then pay the loan early and then take out another one.

Another smart move in using a business loan is to use it to hire short-term workers for large projects. The profits from a successful contract can allow you to pay off the loan with money left for the company. All this requires being smart about calculating the return on investment that can be gotten from the loan.

You can’t avoid taking a loan these days. But it doesn’t mean that they have to be a burden. If you are smart in using them and pay on time, you should come out ahead. The tips above should help a bit but it is a good idea to work with a financial advisor if you think you need to take out a loan. Your lender can also have suggestions since they want you to pay off your loan and to come back to them if you need more funds.


David Rosenberg: A seasoned political journalist, David's blog posts provide insightful commentary on national politics and policy. His extensive knowledge and unbiased reporting make him a valuable contributor to any news outlet.