Our thoughts against any loan is old saying, what our parents have been promulgating.
But
In the modern financial management, we feel if we have a balance of debt and assets in our total balance sheet, there is no harm.
Caveat is that one should have adequate cash flow from investments and able to meet EMI without bothering for them.
1. Loans give an ability to purchase beyond the present lump sum paying capability. You can own a larger asset.
2. Loans provide IT benefits.
3. Many of the loans are insured so in case of loss of life of the loanee the burden of loan is not passed on to the dependents.
4. It's more like an individual attitude. Many people are stressed about a "notional" debt when they actually have an asset against it. Others are fine with this stress. We can say with confidence that no govt officer will ever be able to purchase a residence until retirement in any metro or decent place without loan unless they have an outside support. So for most of us loan will be unavoidable.
5. Loan is also about an individual habit. A person is "bound" by an obligation to pay the EMI. They may not be able to invest the amount equivalent to EMI every month.
6. In case the property is well researched the rental should take care of at least 60% of EMI.
Since you have the entire capital with you, the decision is more based on your personal approach to life. We might have done one of the following:-
a. Buy on loan and invest rest in equity.
b. Buy two properties on loans!
But
In the modern financial management, we feel if we have a balance of debt and assets in our total balance sheet, there is no harm.
Caveat is that one should have adequate cash flow from investments and able to meet EMI without bothering for them.
Loans are a wonderful tool if you know how to use it. Have a look at below points:
1. Loans give an ability to purchase beyond the present lump sum paying capability. You can own a larger asset.
2. Loans provide IT benefits.
3. Many of the loans are insured so in case of loss of life of the loanee the burden of loan is not passed on to the dependents.
4. It's more like an individual attitude. Many people are stressed about a "notional" debt when they actually have an asset against it. Others are fine with this stress. We can say with confidence that no govt officer will ever be able to purchase a residence until retirement in any metro or decent place without loan unless they have an outside support. So for most of us loan will be unavoidable.
5. Loan is also about an individual habit. A person is "bound" by an obligation to pay the EMI. They may not be able to invest the amount equivalent to EMI every month.
6. In case the property is well researched the rental should take care of at least 60% of EMI.
Since you have the entire capital with you, the decision is more based on your personal approach to life. We might have done one of the following:-
a. Buy on loan and invest rest in equity.
b. Buy two properties on loans!
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Whether a loan is good or bad depends on the individual's circumstances and how they plan to use the loan. In general, loans can be a useful tool for financing large purchases or investments, such as buying a home or starting a business. However, if the loan is used for unnecessary expenses or the borrower is unable to make the required payments, it can lead to financial trouble. It is important for borrowers to carefully consider the terms of the loan and their ability to repay it before taking out a loan.
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