Is borrowing money right for you?
There are situations when borrowing money isn’t a good idea. Take the time to consider whether you need to make a purchase. You may want a new car, but do you need it now? Delaying a major purchase until you’re in a better financial position can help you in the long run.
Here are some other reasons to hold off on borrowing money:
- If you have a low credit score, work to improve it so you can increase the likelihood of qualifying for better borrowing opportunities. This may include a lower total cost of borrowing. Learn how you can improve your credit score.
- Major expenses coming up? If your car insurance or other annual payments are due soon, consider waiting. A budget can help you plan for these expenses and take control of your money.
The bottom line
Borrowing money can be a great way to help you achieve your goals, but it’s important to do your homework. By learning more about finances, researching the different borrowing options and discussing your finances with a professional, you could save hundreds or even thousands of dollars in interest and fees. This might even reduce your stress levels as you take steps to improve your financial health.
This material has been prepared for informational purposes only and is not intended to be a substitute for obtaining advice from a financial professional.
Adapted with permission from the Financial Consumer Agency of Canada, 2022.