{"id":1338,"date":"2020-11-08T13:02:25","date_gmt":"2020-11-08T13:02:25","guid":{"rendered":"http:\/\/cashvisory.examinia.com\/?p=1338"},"modified":"2020-11-08T13:09:22","modified_gmt":"2020-11-08T13:09:22","slug":"leverage-debt-can-be-your-good-friend-if-used-wisely","status":"publish","type":"post","link":"https:\/\/www.cashvisory.com\/blog\/leverage-debt-can-be-your-good-friend-if-used-wisely\/","title":{"rendered":"Leverage: Debt can be your good friend if used wisely"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"1338\" class=\"elementor elementor-1338\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-1fa31f9e elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"1fa31f9e\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-3ffd0e7b\" data-id=\"3ffd0e7b\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-1cc7c57f elementor-widget-divider--view-line elementor-widget elementor-widget-divider\" data-id=\"1cc7c57f\" data-element_type=\"widget\" data-widget_type=\"divider.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-divider\">\n\t\t\t<span class=\"elementor-divider-separator\">\n\t\t\t\t\t\t<\/span>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-627fbda1 elementor-widget elementor-widget-text-editor\" data-id=\"627fbda1\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><strong>Key Takeaways<\/strong><\/p><ul><li style=\"font-weight: 400;\"><strong>Loans can help you achieve your goals faster, leave you financially better off and even help you make money if used wisely.<\/strong><\/li><li style=\"font-weight: 400;\"><strong>Home loans help you save on rental cost, buy a home faster and create an asset in the process.<\/strong><\/li><li style=\"font-weight: 400;\"><strong>Education loans can help you complete your degree faster and enhance your income earning potential to eventually leave you financially better off.<\/strong><\/li><li style=\"font-weight: 400;\"><strong>Business loans have several uses ranging from leverage, cash flow assistance and investing in key projects for a company among others.<\/strong><\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-4d659d8b elementor-widget-divider--view-line elementor-widget elementor-widget-divider\" data-id=\"4d659d8b\" data-element_type=\"widget\" data-widget_type=\"divider.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-divider\">\n\t\t\t<span class=\"elementor-divider-separator\">\n\t\t\t\t\t\t<\/span>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-4b758a5 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"4b758a5\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-8fad357\" data-id=\"8fad357\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-b83798f elementor-widget elementor-widget-text-editor\" data-id=\"b83798f\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Should you take loans? The intuitive answer to this question sounds like a resounding no. You would rather save and invest to achieve your goals and keep <\/span><a href=\"https:\/\/www.cashvisory.com\/blog\/compound-interest-make-this-powerful-force-your-friend\/\"><span style=\"font-weight: 400;\">compound interest<\/span><\/a><span style=\"font-weight: 400;\"> on your side. One would think it\u2019s obviously better to earn interest rather than pay interest, isn\u2019t it? This approach would be oversimplifying the concept of debt.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-89a8a37 elementor-widget elementor-widget-text-editor\" data-id=\"89a8a37\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">In certain situations, loans actually help to make money and get to your goals faster. Of course, the type of loan in question is an important factor in determining how you make your decision on whether to borrow or not. It is simpler to decide in case of loans that are considered \u201cgood debt\u201d such as home loan, business loan or education loan. We have analyzed the types of loans with respect to the benefit you derive in our post on <\/span><a href=\"https:\/\/www.cashvisory.com\/blog\/debt-the-good-the-bad-and-the-grey-in-between\/\"><span style=\"font-weight: 400;\">good and bad debt<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-fdc43d9 elementor-widget elementor-widget-text-editor\" data-id=\"fdc43d9\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">For those\u00a0 wondering \u201cLoan is still borrowed money, how does it help me?\u201d, let\u2019s explore how borrowing money in certain situations can work in your favor.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-925bd3c elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"925bd3c\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-906325f\" data-id=\"906325f\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-16545a2 elementor-widget elementor-widget-image\" data-id=\"16545a2\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"693\" src=\"https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image3-1024x693.png\" class=\"attachment-large size-large wp-image-1339\" alt=\"Leveraging debt\" srcset=\"https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image3-1024x693.png 1024w, https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image3-300x203.png 300w, https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image3-768x519.png 768w, https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image3.png 1180w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-de36958 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"de36958\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-599ecc1\" data-id=\"599ecc1\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-fb92d4f elementor-widget elementor-widget-heading\" data-id=\"fb92d4f\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Situation where loans are your friend\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-57d80fe elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"57d80fe\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-e0ac4c9\" data-id=\"e0ac4c9\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-cf416af elementor-widget elementor-widget-heading\" data-id=\"cf416af\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Home loans<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-1625447 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"1625447\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-no\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-e197207\" data-id=\"e197207\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-afc554b elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"afc554b\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-158b20b\" data-id=\"158b20b\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-4ec7cec elementor-widget elementor-widget-text-editor\" data-id=\"4ec7cec\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Home loans open up the possibility of buying a house earlier, thereby improving your quality of life, and simultaneously leaving you better off financially. Let us look at an example to understand this.\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-ef3c7ad elementor-widget elementor-widget-text-editor\" data-id=\"ef3c7ad\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Priya, a young working professional, wants to buy her first home. She has been currently renting an apartment and paying Rs 65,000 in rent per month. She has also been diligently saving Rs 50,000 every month and investing it in a balanced portfolio of mutual funds getting a return of 8% consistently. She has two options now:<\/span><\/p><ul><li style=\"font-weight: 400;\"><b>Buy without mortgage<\/b><span style=\"font-weight: 400;\">:<\/span><ul><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Amount required to fund full purchase: Rs 1,00,00,000<\/span><\/li><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Time needed to save this amount: 11 years<\/span><\/li><\/ul><\/li><li style=\"font-weight: 400;\"><b>Buy with mortgage<\/b><span style=\"font-weight: 400;\">:<\/span><ul><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Amount needed for down payment: Rs 20,00,000 (Rs 80,00,000 will be loaned to her by the bank at an interest rate of 6.5% per annum)<\/span><\/li><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Time needed to save this amount: 3 years<\/span><\/li><\/ul><\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-952d3c5\" data-id=\"952d3c5\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-c352ab7 elementor-widget elementor-widget-image\" data-id=\"c352ab7\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"358\" height=\"315\" src=\"https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image1-1.png\" class=\"attachment-large size-large wp-image-1341\" alt=\"\" srcset=\"https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image1-1.png 358w, https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image1-1-300x264.png 300w\" sizes=\"(max-width: 358px) 100vw, 358px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-688e2a1 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"688e2a1\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-d5d0fb5\" data-id=\"d5d0fb5\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-2446573 elementor-widget elementor-widget-text-editor\" data-id=\"2446573\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Getting a mortgage enabled Priya to buy her house <\/span><b>8 years earlier<\/b><span style=\"font-weight: 400;\"> than she would be able to otherwise. This means that had she chosen to pay for her house in full, she would have to pay rent for an extra 8 years which amount to Rs 62,40,000 (assuming she stays independently). However, with the help of a mortgage, she could move into her own home and pay her interest cost of Rs 52,19,000. As a result, she would save <\/span><b>Rs 10,21,000<\/b><span style=\"font-weight: 400;\"> in pure costs (rent or interest cost). Not only is she better off financially but also bought her house in 1\/4th of the time it would take otherwise. A complete no brainer!<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-1403035 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"1403035\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-c83f6bc\" data-id=\"c83f6bc\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-a4de24f elementor-widget elementor-widget-image\" data-id=\"a4de24f\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"669\" height=\"321\" src=\"https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image4.png\" class=\"attachment-large size-large wp-image-1342\" alt=\"\" srcset=\"https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image4.png 669w, https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image4-300x144.png 300w\" sizes=\"(max-width: 669px) 100vw, 669px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-ded46b6 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"ded46b6\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-6b8d349\" data-id=\"6b8d349\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-2cc78b3 elementor-widget elementor-widget-heading\" data-id=\"2cc78b3\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Education loan<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-11bc834 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"11bc834\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-505597b\" data-id=\"505597b\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-0bdb429 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"0bdb429\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-no\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-cc72ad2\" data-id=\"cc72ad2\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-3ff1a3d elementor-widget elementor-widget-text-editor\" data-id=\"3ff1a3d\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Similarly, the case to borrow can be a compelling one for education. If you don\u2019t take an education loan, you might have to delay your university. With the logical assumption that your income will increase after your degree, it might make sense to pay the education loan interest as it will be more than compensated for by the higher salary (in most cases, you need to be pragmatic while selecting your course and school). You would also not want to sacrifice on your early career building years by delaying going to university as these missed opportunities, although harder to quantify, can have a much bigger impact on your life.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-149a6da\" data-id=\"149a6da\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-55cdc95 elementor-widget elementor-widget-image\" data-id=\"55cdc95\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"239\" height=\"273\" src=\"https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image2-1.png\" class=\"attachment-large size-large wp-image-1343\" alt=\"education loan\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-777bb10 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"777bb10\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-0f46975\" data-id=\"0f46975\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-e7598d3 elementor-widget elementor-widget-heading\" data-id=\"e7598d3\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Business loan<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-5c8e497 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"5c8e497\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-172c8e9\" data-id=\"172c8e9\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-745aca5 elementor-widget elementor-widget-text-editor\" data-id=\"745aca5\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">For a business, delaying certain critical projects or enhancements can be the difference between failure and success. Say you have a great business idea, and the time is just perfect for this opportunity. Due to lack of capital, if you don\u2019t do this now, someone else might do it before you. In a different situation, it could be meeting a business need, something as simple as a short-term cash requirement needed to deliver your product or service to the customer and get paid in return. The concept of \u201c<\/span><a href=\"https:\/\/www.investopedia.com\/terms\/l\/leverage.asp\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">leverage<\/span><\/a><span style=\"font-weight: 400;\">\u201d is of incredible importance to any business in order to ensure they can invest adequately in opportunities and strengthen their returns.\u00a0 This can be demonstrated with a simple example.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-1a2720a elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"1a2720a\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-no\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-c505819\" data-id=\"c505819\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-7ca3e14 elementor-widget elementor-widget-text-editor\" data-id=\"7ca3e14\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Company A has a great investment opportunity in its sight. With the investment made, it expects a 200% return on the investment in a 1 year timeframe. It has Rs 2,00,00,000 in cash that it can set aside for this investment. The company has two choices:<\/span><\/p><ul><li style=\"font-weight: 400;\"><b>Invest without leverage<\/b><span style=\"font-weight: 400;\">:<\/span><ul><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Invest the cash at hand without any borrowing: Rs 2,00,00,000<\/span><\/li><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Cash at the end of the project: Rs 4,00,00,000<\/span><\/li><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Returns: Rs 2,00,00,000 (100% of the cash invested directly by the company)<\/span><\/li><\/ul><\/li><li style=\"font-weight: 400;\"><b>Invest with leverage<\/b><span style=\"font-weight: 400;\">:<\/span><ul><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Total investment with leverage: Rs 4,00,00,000 (Rs 2,00,00,000 invested from company\u2019s cash and Rs 2,00,00,000 borrowed from the bank)<\/span><\/li><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Cash at the end of the project: Rs 8,00,00,000<\/span><\/li><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Amount to be paid to the bank: Rs 2,20,00,000 (including 10% interest per annum)<\/span><\/li><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Amount left with the company: Rs 5,80,00,000<\/span><\/li><li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Returns: Rs 3,80,00,000 (190% of the cash invested directly by the company)<\/span><\/li><\/ul><\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-33d6f1d\" data-id=\"33d6f1d\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-27da533 elementor-widget elementor-widget-image\" data-id=\"27da533\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"285\" src=\"https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image5-300x285.png\" class=\"attachment-medium size-medium wp-image-1347\" alt=\"business loan\" srcset=\"https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image5-300x285.png 300w, https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image5.png 379w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<div class=\"elementor-element elementor-element-72c11f0 elementor-widget elementor-widget-text-editor\" data-id=\"72c11f0\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">The final returns to the company almost <\/span><b>doubled<\/b><span style=\"font-weight: 400;\"> in the case of leverage vs without leverage! If used smartly, leverage can enable faster growth and generate superior returns. However, it should only be used in situations where there is a high conviction in good returns.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-517212c elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"517212c\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-1e91de7\" data-id=\"1e91de7\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-36bf16f elementor-widget elementor-widget-heading\" data-id=\"36bf16f\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Bottom Line<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-aa44a50 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"aa44a50\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-2e5f056\" data-id=\"2e5f056\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-b79d9a6 elementor-widget elementor-widget-text-editor\" data-id=\"b79d9a6\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Numbers always speak louder than words. They have proven that loans, if used well, can be a powerful tool. Use leverage smartly to get to your goals faster and be better off financially.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-63f9d3f elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"63f9d3f\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-18678f9\" data-id=\"18678f9\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-f628d51 elementor-widget elementor-widget-text-editor\" data-id=\"f628d51\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">To guide you better, we are coming up with smart digital tools to help you in your journey in the coming months. Stay tuned!<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Loans can help you achieve your goals faster, leave you financially better off and even help you make money if used wisely. Home loans help you save on rental cost, buy a home faster and create an asset in the process. Education loans can help you complete your degree faster and enhance your [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1339,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[6],"tags":[],"class_list":["post-1338","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-loans"],"uagb_featured_image_src":{"full":["https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image3.png",1180,798,false],"thumbnail":["https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image3-150x150.png",150,150,true],"medium":["https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image3-300x203.png",300,203,true],"medium_large":["https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image3-768x519.png",768,519,true],"large":["https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image3-1024x693.png",1024,693,true],"1536x1536":["https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image3.png",1180,798,false],"2048x2048":["https:\/\/www.cashvisory.com\/blog\/wp-content\/uploads\/2020\/11\/image3.png",1180,798,false]},"uagb_author_info":{"display_name":"Admin","author_link":"https:\/\/www.cashvisory.com\/blog\/author\/admin\/"},"uagb_comment_info":5,"uagb_excerpt":"Key Takeaways Loans can help you achieve your goals faster, leave you financially better off and even help you make money if used wisely. Home loans help you save on rental cost, buy a home faster and create an asset in the process. Education loans can help you complete your degree faster and enhance your&hellip;","_links":{"self":[{"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/posts\/1338","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/comments?post=1338"}],"version-history":[{"count":10,"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/posts\/1338\/revisions"}],"predecessor-version":[{"id":1353,"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/posts\/1338\/revisions\/1353"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/media\/1339"}],"wp:attachment":[{"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/media?parent=1338"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/categories?post=1338"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cashvisory.com\/blog\/wp-json\/wp\/v2\/tags?post=1338"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}