When you need to pay for something, or maybe just have something you want, you don’t always have the money for it right away. You enter the borrowing vs saving debate! You can either borrow money and buy what you need now. Or you can wait until you have saved up and then make the purchase. Both borrowing and saving have different advantages and disadvantages. It’s important to think about them before you decide which one is the right choice for you. Payday Loans Net weighs up the pros and cons of borrowing vs saving.

There are several things to consider in the borrowing vs saving debate, such as how quickly you want or need the thing you’re hoping to buy. You also need to consider whether you will be able to pay back money that you borrow, including any interest and fees. To decide whether it’s best to borrow money or to spend some time saving up, think about the following factors.

Borrowing VS Saving: Factors To Consider

How Quickly Do You Need The Item?

How much time you have available is one major factor that will influence whether you decide to borrow or save. If you need to pay for something right away, borrowing will make more sense than saving up. If you can borrow the money you need, you can take care of things you need to pay for now. Maybe you need to fix a leaking roof or pay for emergency car repairs.

But, if you can wait to pay for something, it could be a better choice to save instead. By the time you’re ready to pay, you could even find that there is a sale and with reduced prices. For example, maybe you’ve got your eye on some new furniture. Once you’ve saved the money you need, you could find the pieces you want in the sale.

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When you’re thinking about time, you should also consider saving for a particular period versus paying the money back for the same period or maybe even longer. If you save up for a year, you could be earning interest on your savings. But if you pay a loan back for a year, you’ll be paying interest on the money you borrowed. And the longer you borrow the money for, the more you will be paying back.

How Much Does It Cost?

Cost in another important element to think about when you’re deciding between borrowing vs saving. If you choose to save up for something, you’ll pay exactly the amount that you need to. In fact, if you use a savings account with interest, you’ll be able to make money from your savings. However, if you decide to borrow money, you can have a range of fees that you need to pay, as well as interest. Depending on the type of loan and the interest rate, you could end up paying a lot more than you would if you were able to pay for something outright. Payday loans UK, in particular, are often a more expensive option.

On the other hand, borrowing money can make your spending more manageable. Your can spread out the cost over a number of months or even years so that you don’t have to make one large payment. Sometimes you can also find interest-free ways of borrowing, such as getting a credit card with an initial 0% interest rate.

Do You Want To Own Something Outright?

If you buy something with money you have borrowed, it can’t technically be called yours. For example, if you have a mortgage, your home doesn’t belong to your outright. Until you pay off your mortgage, it actually belongs to the bank.

There are some types of loan and financing that mean if you can’t keep up your payments, you might have to give up what you bought. For example, if you take a logbook loan and don’t repay it, you could end up losing your car. If you save up for something, you don’t have to worry about this at all. A secured loan will also mean you need to risk something you own. For example, you can secure a loan against your home.

Save Money By Borrowing


Sometimes, borrowing money will help you to save money. If there is something you need to pay for that might be more expensive if you want until later, borrowing money to pay for it now could be the right thing to do. However, you do need to weigh up the cost of borrowing vs saving i.e. against waiting until you can save the money you need. The amount you’ll repay needs to be less than what you would spend on your purchase in the future. This might be a good choice if you want to buy something at a sale or special price.

Investing in the Future

Some things are very hard to save for, but they can have a huge impact on your life. For example, it would take a very long time for most people to have enough money to buy a property or pay for a university course without borrowing any money. These are things that help you invest in your future by giving you a secure home or valuable asset, or helping you get a great start in your career. It could take you years and years to save up to pay for things like this, so borrowing is the most sensible option.

Still, you can find out the best way to borrow money so that you get a good deal. For example, if you’re going to university, a government student finance loan makes it manageable to pay back the cost of your fees and living costs. There are special rules that mean you have to be earning a certain amount before you start payments, and your debt is written off after a set period too. Some banks are also introducing new mortgage products, some of which are designed for young adults to help them get on the housing ladder.

Perks to Borrowing

Sometimes, borrowing money means that you get some perks and freebies with your loan product. These are designed to attract you to certain products, although you should make sure that you don’t choose based only on what you can get for free. Free stuff offered when you borrow, can include gift vouchers when you get a new credit card or perhaps cashback when you secure a mortgage. These freebies can sometimes make borrowing an attractive choice, but only if you’re prepared to manage the extra costs of borrowing.

Savings Accounts

If you decide to save money, you can just keep your money in your general current account. However, you also have the option of opening a savings account. These can be useful, as you’ll be able to earn interest on your money as you save. If you want to open a savings account, there are a few things to consider.

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Firstly, some accounts have a minimum amount you need to deposit to open one, which could be more up to £1,000 or more. However, many accounts won’t require anything at all or ask for just a small amount. Some accounts also demand that you make regular payments of a certain amount. You should check how you can access your money too. Some accounts offer instant access, while others ask you to give notice in advance of withdrawing money. You might also have a limit on how many times you can make withdrawals within a specified period. Like some borrowing products, you can also find savings accounts with freebies.

Borrowing VS Saving Summarised

When weighing up borrowing vs saving, keep in mind that every situation is different. Sometimes borrowing is the right choice, and sometimes it’s better to save. Think about what you can afford and how urgent it is to pay for something. Weigh up whether it’s better for both your finances and your lifestyle to borrow money or to save and pay later.


PUBLISHED BY
Felicity Jones
Felicity Jones is the founder of the Payday Loans Net blog and has been working tirelessly to produce interesting and informative articles for UK consumers since the blog’s creation. Felicity’s passion is travelling. She loves her job because she can do it from anywhere in the world! Whether inspiration hits her while sitting on the balcony of a French B&B, or whether she is struck with an idea in a roadside cafe in Moscow, she will always make sure that the idea comes to fruition. Felicity’s insights come from her knowledge gained while completing her degree in Economics and Finance as well as from the people she meets around the world. Her motto is: Everyone you meet has something valuable to teach you, so meet as many people as you can!

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