If you are thinking about taking out a loan at some point then you may wonder what time of the year might be the best to do so. There are many things that you should consider and they are likely to be personal to you although some yearly occurrences might be similar for most people.
Things to consider
Firstly it is worth considering what you should be thinking about. When you borrow money one of the most important things to be sure of is that you will be able to afford the repayments. Before you take out the loan it is wise to find out how much these repayments will be and then check your own budget to see whether they are something that you will be able to afford. Look at how long you will need to make these repayments for and try to imagine whether they are something that you will be able to afford in the future as well as now. This can be tricky especially if it is a very long-term loan.
It is worth imagining that the interest rates go up and thinking about how you might cope in this situation. Think about whether you will still be able to afford the repayments. It can even be worth doing some calculations as to how much it would have to go up for you to find it impossible to manage the repayments. This will help you in making your decision.
However, when we look at our finances to think about how much we can afford to repay, it is worth considering the time of year. We will not always have the same amount of money available to us in every month of the year and so it is good to think about this. If you are only borrowing for a short amount of time, perhaps getting out a short-term loan, then it is worth thinking about doing it at a time when you are more likely to be able to afford the repayments.
Times of the year to be aware of
For many people thy have a lot of expenses coming up to Christmas. Obviously, this will depend on whether you celebrate Christmas but it could apply to other festivals, celebration and birthdays instead. If you spend a significant amount of extra money then this is probably not a good time to also have to find the money for loan repayments. If the loan will take longer than a year to repay then you will need to think about how you might budget in order to manage those repayments. Perhaps you will need to put some money away each month towards it or cut down on your spending at the time to afford it.
There may be other times in the year that perhaps you tend to spend more money. Perhaps when you take holidays, when there are family birthdays or anniversaries or things like that. Consider whether you can identify any times like this when you do spend money. There may also be times when you have bills to pay, perhaps the car insurance, tax and/or MOT, annual services on car, boiler and things like that or when yearly insurance renewals are due. If you are not sure of when these are then it could be good to look back over previous bank statements to see. If you do not have access to these or tend to pay more in cash then you might be able to look through your paperwork if you have it still. Otherwise you should spend some time noting down these things before you consider getting a loan so that you can look for trends in spending pattern and see whether you need to be aware of any particular times being more expensive.
It is also important to make sure that you check for any times when you get a lower income. Most people are in jobs where they et paid a consistent amount all year, but some are not. You may do seasonal work or are self-employed and find that some times you have less money coming in than others. It is worth checking and considering this as well as it could make a significant difference to how easily you can afford a loan repayment. So in answer to the question posed, there is likely to be a time of the year when you are more easily able to afford a repayment but this will not be the same time for everyone. Think about you own personal finances and then you will be able to see when might be the best time to take out a loan and when you might be better off waiting. It can be worth taking the time to do this as it can make a significant difference to how easily you can manage your repayments.