Although most financial advisors caution people against creating debts, there is a time when taking up a loan could be the right decision. In fact, you cannot rely on your savings if you are planning to in a massive project such as in the real estate. The problem comes when you take a loan to fund your expensive lifestyle.  

So, what are the best times to borrow money? Well, there are instances when borrowing money is the smartest decision that you can make. Some of the situations might be a matter of life and death or very lucrative business opportunities. Here are 9 best times when it is right to borrow money. 

1. For Emergencies 

If you have an emergency and you can’t raise the required amount, then you have all the reasons to borrow money. Most emergencies are medical in nature. For example, if you have been hospitalised or one of your family members is in the hospital, you can borrow to pay medical bills. This is a life and death situation, and thus, money cannot be equal to human life. However, you need to borrow diligently because medical costs can be very high. Go for the lowest interests in the financial. You should also choose less expensive wards to reduce the overall medical bills. 

2. For Education 

Improving your education is an investment in yourself. Furthering your education comes with numerous perks, including promotions, better pay, and so on. In short, you will be earning more money from your career as you progress in educations. Therefore, borrowing money for tuition is one of the best ways of spending your loan. The loan will propel your career, and in the long run, you will be earning more money. That makes it an ideal way of investing credit. You can also borrow money to pay for your children’s education. However, go for low-interest loans in both cases. 


3. To Pay Off Toxic Debts 

Sometimes, circumstances may force you to take out high-interest loans. For instance, if you have a medical emergency, then you take the loan that is available at the moment to save a life. But you can deal with such loans later by taking another low-interest loan. For instance, if you have a couple of high toxic debts, you can go for a lower interest personal loan to pay off the expensive. This is definitely a smart best way of dealing with expensive debts. You will not only reduce the cost of loans but also improve your credit score. 

4. To Buy A Major Asset 

Some assets that make our lives better, and thus, they are more like basic things to us. These are assets that can qualify you to create a debt. For example, if you want to buy a house, then it is fine that you take out a loan provided, you will be able to pay it off. If you want to purchase a car to ease your mobility, then you can create debt. However, you should be able to pay off the debt to avoid losing the collateral. It is also wise to go for the cheapest money in the market. 

5. When Moving 

Anyone who has gone through a moving experience will tell you how stressful it can be. It is also a very costly affair. From paying the mover, buying boxes to many other costs that keep popping, it can cost you thousands of dollars. Sometimes, moving can be categorised as an emergency, especially when you are under a notice to move. If you have don’t have enough money, then borrowing would be the right thing to do. However, you need to go a cheaper loan. A personal loan would be the best option as opposed to using a credit card. 

6. To Pay car repair Bills 

A car is one of the assets that is difficult to do without. It enables you to move around efficient as well as handle more tasks on a day as opposed to using public transport. So, no matter the financial condition you are in, you need a car. If your car breaks down and you don’t have enough money to pay off the repair bill, then you have every reason to create a debt. However, you should try as much as you can to avoid putting the bill on a credit card. A personal loan would be the best option because of low-interest rates. 

7. For Home Improvement 

home improvement

Inefficient homes can cost you thousands of dollars every year. If you are having a problem with the plumbing system, you can take out a loan to improve its efficiency. Other cases in home improvement when borrowing would be okay is updating your kitchen, replace the roof, and add outdoor features such as decks and patios amongst others. You have various loans that you can select from for home improvement. You can take the homeowner’s equity line of credit, which is based on your equity. Taking out a cheap personal loan for home improvement is also a smart idea. 

8. When Your Business is Doing Well 

If you are in the business sector, then taking up loans is the best way to expand your business. It’s also a smart way to enhance cash flow. When your business is performing very well, you should start evaluating your contingency plan. There is always a time when most businesses experience a low season. That’s when a line of credit can be a lifesaver. So, when your business is doing very well, many banks will be ready to give a line of credit, which you can use to improve cash flow in case of unforeseen emergencies and low season. 

9. Lucrative Deal 

For those in businesses of selling cars and real estate, a good deal can come up when you don’t have enough money. In instances where you are sure that you will make good money if you jump in, then taking up a loan would be a good decision. However, the cost of the loan is an important factor to consider. A personal loan is always the best choice due to lower interest rates. 


Creating debts is a big responsibility that has severe ramifications if you don’t keep your side of the bargain. Failure to pay loans affects credit score, and prevent you from borrowing money in the future. However, it is always advisable that you go for the cheapest loan possible such as personal loans. Their lower interest rate and extended payment period make it is easy to repay them.  

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