Our underwriters are amazing financial analysts. They carefully review Craft3 loan applications, and they make sure the business owner / homeowner has a clear and comfortable path to repayment. They are also a great resource.
We sat down with Senior Commercial Underwriter Brad Ferris to ask him, “How would you think about whether to pay cash or finance a major purchase such as a car or a new roof?”
"It’s a great question. There’s no simple answer but understanding the tradeoffs can help you make a choice that works for your situation.
First off, it’s important to understand how much you will pay in interest over the life of the loan. You can then weigh that additional cost against the cost of paying in cash. Paying in cash can decrease your liquidity which may mean that you have less emergency savings. This can make it harder for you to deal with a possible future emergency expense. And it could force you to take on more costly credit card debt or access retirement savings.
However, if you have extra cash on hand, using that to fund a major purchase can make sense. You also may be able to pay for part of a major purchase in cash and finance a portion — an option that could help you strike the right balance."