In these troubled times, many will struggle financially now and in the foreseeable future. Naturally therefore many will think about taking out loans to help them get by. But is now a good time to take out a loan? Well that depends on what type, and why.
After all, there are many types of loans! Loans can be for a business, for an individual, and can be offered by a traditional lender, or the government. Or be bank loans guaranteed by the government. The context is important. What is also vital is the situation of the person or company wishing to borrow. To take on extra debt is a big undertaking, and must only be done after considered thought and after following a due process.
If you are going to borrow, do not do it to starve off disaster, with no thought of the consequences. You should never borrow to play for time, or to temporarily cover other debts. Borrowing depends how sure you are of what the future holds. This is relevant whether it is a personal or business loans. Grants, such as those offered to the self-employed, do not have to be repaid. But loans by definition do. Always read the terms and conditions in full before proceeding.
Bounce back loans for example. And business loans too. Not all loans are the same. With a global pandemic, the governments of the world have had to step in to help businesses. Otherwise economies are bound to collapse. Bounce back loans are a no-brainer, offering no repayments for a year, nor interest. You can apply for up to 25% of your annual turnover. Other business loans announced in March by the Chancellor are also work considering. They still necessitate repayments though at some point in the future. They are not free money, as they are not grants.
It may be a tough time to persuade lenders to supply finance to you, so do ensure that your credit score is as good as possible. This increases the chances of a lender trusting you, and thus accepting your application for a loan. If in the current climate you struggle to make repayments, get a payment holiday off the lender. Do not simply cancel your direct debits.