Originally Posted by
NE_Pilot
Thats not entirely true. I have taken out loans for things that I can afford to buy outright. Every once in awhile you can get a big ticket item like furniture or a TV financed at 0% for a year. I would take, if I were in the market anyway, 0% for a year over paying right then outright. Even 1-2% interest may be worth considering depending on your timeline, alternatives and expected returns.
A loan, like any other financial instrument, needs to be understood and weighed against other options. I would agree that most people may not know how to or actually do weigh the loans they sign or fully understand what is happening. I blame that on the public schools, they should be teaching finances, but in my experience they do not.
If you have to take out a loan because you don't have the money, by definition, you can't afford it. Period.
Not paying cash for something, taking low interest or zero interest loans and "investing" the money to make interest or investments is stupid because you are ignoring the risk(s) involved.
If you truly believe in what you wrote, why aren't you continuously taking out loans to invest the money so you can beat the interest required and make a profit? You know that old phrase, you have to spend money to make money. Unhappy