In today’s economic climate, borrowing money can feel more complicated than ever. With interest rates remaining elevated and inflation still impacting household budgets, many members are asking: Is now the right time to take out a loan? The answer depends on your financial goals, the type of loan you’re considering, and how well you understand your options.
High-rate environments can make borrowing more expensive, but they don’t necessarily mean you should avoid loans altogether. In fact, there are situations where borrowing still makes sense—especially when it helps you consolidate debt, invest in something essential (like a reliable vehicle), or take advantage of a time-sensitive opportunity. The key is to borrow strategically.
Where to Start
Evaluate your needs. Are you financing a necessity or a “nice to have”? For example, replacing a failing furnace or upgrading your car for winter safety may justify a loan, while discretionary purchases might be better postponed.
Assess your budget. Can you comfortably afford the monthly payments, even if rates fluctuate? Use tools like our loan calculators to estimate your costs and compare scenarios.
Look beyond the interest rate when comparing loan options. Consider the loan term, monthly payment, total cost over time, and any fees or penalties. A longer term may lower your monthly payment, but it could increase the total interest paid. On the other hand, a shorter term might save you money in the long run if your budget allows for higher monthly payments now.
Consider your credit score. In a higher-rate environment, having strong credit can help you qualify for better rates. If your score needs improvement, consider taking steps to boost it before applying, like paying down existing debt or correcting errors on your credit report.
Banking with Heart
We understand that navigating loan decisions right now can feel overwhelming. That’s why we offer transparent and personalized guidance, competitive rates, and flexible terms designed to fit your life, not just the market. Whether you’re considering an auto loan, personal loan, mortgage, or home equity option, our team is here to help you make informed choices.
We also know that digital convenience matters. Our streamlined application process, real-time status updates, and member-first approach make borrowing easier—even in uncertain times. And because we’re a credit union, our focus is on your financial well-being, not shareholder profits.
Now's a great time to review your financial goals and needs and explore whether borrowing could help you move forward. With the right strategy and support, even a high-rate environment can be navigated with confidence!
The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. Some products not offered by PSECU. PSECU does not endorse any third parties, including, but not limited to, referenced individuals, companies, organizations, products, blogs, or websites. PSECU does not warrant any advice provided by third parties. PSECU does not guarantee the accuracy or completeness of the information provided by third parties. PSECU recommends that you seek the advice of a qualified financial, tax, legal, or other professional if you have questions.