Millennials are part of the generation that was brought up in times of extreme economical volatility and insecure job market. They have witnessed the disrupting ripples in the value of real estate owned by their parents, and the crashing investment and retirement schemes. As a result, they have become extremely cautious with the plans that can impact their future.
If you ask a millennial about their view regarding long term loans, which forms a part of future plan in itself, they may not appreciate the prospect. Their reservations are justified; but on some fronts, these financial tools can also help them.
Cut the Bulk
Millennials were not blessed with cheaper education unlike previous generations; neither does the cost of living seems to be stalling anytime soon. Despite exercising extreme caution with their spending, they have still found themselves in all types of debts, which they are struggling to pay off. Worst of all, they are applying for more and more payday loans every day. As a result, their credit score is taking a hit.
But, this is where long term loans can help the out. Acquiring a loan, which is substantial enough to meet their current expenses and debts while allowing the terms of repayment that can be tailored according to their capabilities, may help them out. Through a long-term loan, millennials can work towards not only arranging up for their short term and long term finances but also towards restoring their credit score.
Suits Their Conserved Nature
Millenials tend to be more conservative with their spending and stick to budgeting practices. Acquiring a long-term loan with fixed interest rates can help them to plan their budget more appropriately as they won’t have to worry about the market uncertainties in terms of varying interest rates.
Millenials Believe Less in Investments and More in Savings
In order to safeguard their future, millenials tend to take the route of saving rather than investing in a project and enjoying the returns. A research suggests that more than half of the millennials in UK prefer to have cash assets and only 28 percent of their assets forms part of an equity. But this is where they may be getting it all wrong. Royal London suggests that the cost of living is expected to rise by 150% over the next 30 years. Hoarding your savings in the form of cash in such a climate may not be a wise idea after all.
Much better plan would be to take advantage of a long term loan investment like buy-to-let mortgages and not only boost your savings through the returns but also generate a healthy source of income.
Millennials are Dutiful
Millenials are pretty obedient with the task and duties they are entrusted with. At least they try to be. They can use this trait to be regular with their payments of long term loans which may help them to get an incentivized interest rate in future.
Millenials although highly educated lack the basic understanding of the finance industry and it is to no surprise that they don’t consider long term loans as a wise idea. With a bit of help and tutoring, they can be educated over the advantages that long term loans hold for them.