Why I Hate Loan Companies - But Secretly Love Them

I’ve got a bee in my bonnet!

A bit of indignation… that sort of thing.

“Why? What’s up David?”

It’s the TV Ads.

“What?” I hear you asking with an incredulous gasp!

Let me explain…

Is It Me?

Is it me, or are the TV adverts full of promotions for this car, and that car, and the other car… or the WeSellAnyCarAtAnyPrice car-sales-type companies.

Car loan — “Buy a nice new car… with borrowed money.”

…each one encouraging you to take out a loan!

A LOAN for goodness sake!

For a product that will depreciate faster than you can drive it off the forecourt.

Loans Versus Loans

A scheduled TV programme ran an article on car sales.

It compared the cost of taking out a particular car company’s loan with a bank loan.

Compared one sort of loan… with another loan.

It’s like comparing a potato… with a potato!

Comparing loans — It doesn’t really compare

Inside I was fuming.

“Isn’t that the reason the country’s in a mess!”, I shouted at the TV …not really expecting a reply …and certainly not ready if it had replied!

You see… Call me old-fashioned.

But what’s wrong with saving up for something?

We seem to have become accustomed to instant gratification.

“I need to eat now!” we say as we drive by the fast food restaurant.

“I want it immediately!” …as we download the Kindle version of the highly anticipated book.

“I must have that car right now!” …as we arrange the 22% APR, 5-year loan.

But what’s wrong with waiting until we can afford it?

…with saving up for it?

The Wonderful 5 Year Wait

I suppose I was fortunate to get more than 5 years notice when my wife told me she wanted a “posh cruise” for our 25th wedding anniversary.

So after wiping away the sweat, I opened a simple savings account.

And I drip fed into it every month (by standing order so it didn’t have to rely on my sieve of a memory!).

Although we had to adjust a little, we got used to the money going out of the current account each month – and eventually we totally forgot about it.

Until it came time to book our cruise.

And guess what.

The bank manager had topped it up. We’d gained some extra money for free …some interest on our savings.

A nice bit of spending money for the holiday! All for free!

Now that’s much better than taking out a loan, with us having to pay lots of interest to the bank!

The bank paid us instead!

And there’s another sobering thought which has just dawned on me…

It’s this…

If we’d gone for this instant gratification thing and had taken out a loan for the cruise

…or even worse, if we’d put it on the credit card

…we’d still be paying it off now!

Hang on a minute!

Actually… No, we’d probably still be paying off only the interest at this stage.

What an anti-climax!

2 weeks of fun…

In exchange for a lifetime of debt.

So I think you can understand why I get a little cross when we’re bombarded from behind our TV screens with the instant gratification messages…

Making the loan companies rich, and throwing people’s hard-earned money at the wasteful banks.

Sad, eh?

But…

But on the other hand, perhaps I should keep it a secret.

After all, who would have given us the free spending money – if the banks hadn’t had all that money pouring in from those massive loan interest payments?

Hmmm…

On second thoughts ….shhh!

Pretend I never mentioned it!

Over To You

So what’s your financial secret?

Go on… you can share it.

Pop it into the comment box below and let’s keep the conversation going…

P.S. Here you can see lots more about our that very first cruise we saved up for.