Talking Loans Today

Jun 21 2007

Part of the Funky reason for being is to talk about personal finance. The reason I like personal finance blogging so much is that there is a lot of really not that complex stuff, that I know about from researching it heavily and from doing 2 college degrees in finance related disciplines, aswell as working as a financial planner.. but that most everyone does not know about automatically. Personal finance is not taught in high school, where it should. And, although everyone loves to spend money, and usually wants to have more money, they find the whole idea of learning about it and thinking about it (wealth creation, budgeting, saving etc etc.) dry and boring, and they almost think that it should just “happen” to them, like winning the lottery, without some little bit of effort and energy on their side.

This is where personal finance bloggers come to the rescue. We make it simple, interesting and fun to read about this stuff. Hopefully anyway!

So, today I am talking loans. And have a quick tip for you. A way to make sure you get the most value out of your mortgage in particular. This applies if you are looking for cheap loans, secured loans or personal loans.

It is the basic idea that where possible you should pay extra into your loan may sound like common sense, but people do not really generally understand the reason why they should, and when they should.

And it is very simple.

If you can earn more than the rate of interest on your loan from an investment, then you are better off putting your money into the investment. If you cannot earn more, then you are better off “investing” your money in you loan.

That is it. Now go do it! Even an extra $10 makes a big difference (well okay not that big, but something) over time as a result of compound interest, on a 30 year loan.

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Posted by funky under Loans