Is there an Optimum age for getting a Loan?

When taking out a loan, there are many things that we should consider. We need to think about the cost, our income and how well we will be able to pay it off. One thing that may occur to you is whether there is a good age to be when you are applying for a loan.

Obviously you will need to be eighteen years old in most cases before you can apply for a loan, but after this age, is there one age that it is best to borrow at. It is worth considering things that happen at different ages to ponder the answer to this question.

When we are younger, we have less financial commitments. We are less likely to have a family to look after and less likely to have our own home and so our outgoings will be less. As we get older we may meet someone else and have two incomes in a household, which could be better but there may be a mortgage to pay. Having children will increase costs and these will continue to rise each year until the children get a job. Once they leave home, you will be older and potentially less employable, this means that if you lose your job, you may find it more difficult to get another one. As you reach retirement age you are unlikely to be allowed a loan, even if you have a good pension income.

With regards to income, you are likely to get an increase as you get older. This means that potentially you will have more money to pay off the loans, but as explained above, you will probably have more expenses as well. This may mean that the amount of available money you have, could potentially stay about the same unless you do not have children or until they start earning money.

Borrowing at a young age can start a trend that you continue for the rest of your life. It may seem good to be able to get some extra money and buy extra things but it is a really expensive way of buying things. If you add on the cost of the borrowing to the items that you buy, then most of them will be so much more expensive that you would not have bought them if that was the ticketed price. You could start to from a habit of borrowing money to buy extra things that you need and this is not a good habit to start. It is much better financially if you save up for things and buy them like that. It is not always easy, but it can make a huge financial difference.

If you take on a loan and then find that you have children, then you may regret it. Those loan repayments may start to become a big chore, particularly when expenses go up and perhaps one income stream is lost. It is not always easy to predict when children might arrive, but making sure that you do not have debts before they do, can be a really wise thing. Therefore it is best not to borrow money before you have children.

Once the children are earning themselves, you may find that you are a lot better off. They may be contributing to the household income and everyone can go to work if they want to as there will be no childcare necessary. This means that it could be thought to be a better time to borrow money. There may though be some loans that are no longer available to you. You may find that as you are closer to retirement age then lenders will not be so happy to let you have a loan. It is also wise to consider that there is more risk that you may be unwell and unable to work and this could means that you will not be able to easily make the loan repayments and this could cause a lot of problems and worry.

As you reach retirement you are less likely to be able to borrow money. Most pensioners find that their income is reduced anyway. Although they tend to have less costs as their children are usually less reliant on them, a pension income tends to be smaller than a salary and therefore there is not spare money to pay for repayments on a loan.

So it seems that there probably is never a good age to get a loan. Therefore it is always important to try to think about the future and how your life may change with regards to income and expenses when you are considering borrowing money. It is not always easy to predict what might happen, but always try to imagine whether you could cope with repayments if your income goes down or costs go up and decide whether you will be able to afford the repayments.

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