21st – 27th March 2022

We understand that students likely have never borrowed money except from friends and family. Borrowing or getting a loan is neither ‘good’ nor ‘bad’ but taking out a loan is a big decision. You must be over 18 to get a loan. Is borrowing the best option?  


We will all need to borrow money at some stage in life. It could be for many reasons, like: 

  1. Need & Want: We borrow because we need to purchase something or we want something now. Ask yourself do you really need it? Can you save for the item?   
  2. Life: We borrow at different life stages – Going to College, First Car, Holiday,  Wedding, Mortgage or for emergencies if we do not have enough Savings.  
  3. Expensive: We borrow if the item (e.g. a car) is too expensive to save for. Everyone else has it, why not me? Ask yourself what happens if I cannot pay back the loan?  


Let’s look at a Borrowing Case Study…Meet Ava! 



  • Ava is aged 18 and lives with her parents  
  • Looking to borrow €8,000 from the Credit Union to buy a car.  
  • The repayments will be €60 per week for 3 years @ 10.5% interest rate. The Total Cost of Credit will be €9,329.  
  • Ava works part-time in a local hotel and claims Job Seekers Benefit (Social Welfare Payment) for the days she does not work.  
  • Ava gives her parents €80 per week to cover bills and food.  

At off peak seasons during the year, such as November or January, there is no hotel work and Ava’s income drops from €410 per week to €203 per week (Job Seekers Benefit).  Ava has €4,500 saved up in her Bank Savings Account, as she is saving to go to college in Scotland.  



Ask Yourself 

Should she should borrow €8,000 to buy the car. What questions should Ava be asking herself before she borrows? 


  • Does she really need the car? 
  • Can Ava afford the repayments? 
  • What if she cannot pay back the debt? 
  • Other car expenses – insurance, tax, fuel? 
  • What other options does she have?  


Borrowing allows you to buy now and then pay back the loan later.  

This usually means you pay more because there is a charge for borrowing – the interest on your loan and fees and charges. Because of this, borrowing money to buy something is more expensive than saving for what you want. So before you borrow you should be sure you really need the loan and that you can afford to repay it. 

If you have a loan and get into difficulty making the payments, it is important to seek help early. A MABS Money Adviser will give you all the information and support you need to get back on track once again.  


Don’t forget to check out our previous blog on Savings and take a look at our next blog for top tips on Protecting your Money!

For more information on Global Money Week (GMW), please visit the official GMW website.