Saving money vs Taking a loan
                     SAVING MONEY VS. TAKING A LOAN
INTRODUCTION
Managing your finances during 
times of crisis is indeed a tough 
challenge and requires a great deal 
of hard work, some serious 
discipline, and patience. 
Source: www.clix.capital
PROS & CONS OF USING SAVINGS
INTEREST-FREE 
PURCHASE
Suppose, if you want to buy an 
iPhone or any other expensive 
gadget and decide to apply for a 
personal loan for that, you need to 
pay the personal loan interest So in 
totality, you end up paying the 
Amount X + interest towards your 
purchase. 
If you decide to go for it from your 
savings, you don’t need to pay any 
interest and only the actual cost of 
the product.
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STRESS 
Spending from your savings might 
feel burdensome initially but it 
relieves you from the prolonged 
stress of repaying the loan over the 
loan tenure. 
Also, there is a spending limit 
which you draw for yourself as you 
know your savings and how much 
you can spend.
Source: www.clix.capital
BETTER 
FINANCIAL 
WISDOM
Spending from your savings might 
feel burdensome initially but it 
relieves you from the prolonged 
stress of repaying the loan over the 
loan tenure. 
Also, there is a spending limit 
which you draw for yourself as you 
know your savings and how much 
you can spend.
Source: www.clix.capital
SAVINGS LIMIT 
THE 
AFFORDABILITY
One of the biggest cons of savings 
is that you can only afford to spend 
what you’ve saved. 
People also advise you not to 
exhaust all your savings in one go 
and keep a backup too. Also, that 
limits your affordability and your 
wants to the extent of what you’ve 
saved which isn’t always feasible.
Source: www.clix.capital
DISSOLVING 
SAVINGS TAKES 
LONG 
 Very few people keep their saved 
amount in bank accounts and 
prefer to keep them invested in 
multiple forms like shares, mutual 
funds, real estate, gold, and bonds. 
Dissolving these savings into cash 
takes time and thus is a long wait 
which isn’t really a feasible choice 
when you need instant funds.
Source: www.clix.capital
PROS & CONS OF AVAILING A PERSONAL LOAN
INCULCATES 
FINANCIAL 
DISCIPLINE
The decision of availing a debt 
requires a degree of financial 
discipline that makes the person 
realize and value the cost of every 
penny spent till the loan is paid off. 
If you look on the brighter side, 
taking a loan actually makes you 
financially responsible.
Source: www.clix.capital
NO RESTRICTION 
ON END-USE
Unlike a home loan or car loan, a 
personal loan doesn’t have any 
restriction on the end-use of the 
loan amount. Having the freedom 
to use the loan amount any way 
results in greater flexibility in 
spending.
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EMI BURDEN
Loans come with the implication to 
pay the EMIs over the loan 
repayment tenure that can last 
from a few months to years. 
This means that the financial 
impact of one big purchase is 
tangibly felt over the next few 
months or till the loan is paid off.
Source: www.clix.capital
REQUIRES A HIGH 
CREDIT SCORE
Most lenders require and prefer the 
applicants to have a high credit 
score, over 725, to be eligible to 
apply for a personal loan. This may 
seem like a barrier to obtaining 
instant funds for those with a low 
credit score. 
Source: www.clix.capital