Is it possible to save money by borrowing money? Consumer finance experts answer that question with a very emphatic yes. But there’s a huge caveat to that loud affirmative where you need to be careful and do all the math in order to make certain that a given loan contract makes sense in the long run.

How should you approach this dilemma? First, take a look at the common types of loans that are designed for long-term savings, like personal notes, refinancing agreements, and business lines of credit. Each one has the potential to put many thousands of dollars into your pocket. Here’s a summary of how each one works and how you can improve your financial situation by securing a new debt obligation.

Personal Loans

Personal loans are unsecured borrowing usually for several years at whatever interest rate your lender offers, based primarily on your credit rating. Because there’s no collateral involved, you’re simply borrowing based on your good name and proven ability to repay the debt. How can a personal loan save you cash? If you can get your hands on a sum of money to make a profitable investment, one with a yield higher than the loan’s interest rate, you can pocket the difference. Many people take out personal loans to buy stock, with the hope that the price of the stock will rise enough to pay off debt and earn a tidy profit.

Student Loan Refinancing

Refinancing a student loan is a great way to save that many don’t think about. Most working adults have better credit scores now than they did when they took out their education obligations. That means a refi can be written with a lower interest rate, allow more years for repayment, and come with lower monthly payments. The new agreement would pay off all existing student loans and open a new obligation that will save you not only in the short-term, but could add up to tens of thousands over the life of the loan.

Car Loans

Consumers have been getting auto loans refinanced for decades, with mostly positive results. In most cases, car refi’s aren’t for large amounts of money but can help people in financial need stretch out their payments and lower their current monthly obligation right away. If you’ve already paid off a significant portion of the loan balance, this could mean small monthly payments and a more favorable interest rate to give your monthly budget a break.

Home Refinancing

Probably the most common way to improve your financial standing is by refinancing your mortgage. Although you may not think an interest rate percent change is much of a difference, but depending on the mortgage balance it can add up to huge savings over the course of a 15 or 30-year mortgage.  Just keep in mind there are costs associated, so if you’re planning on staying in the home for the next 5-10 years, it may make sense to proceed.

Business Lines of Credit

Business credit agreements take multiple forms, usually based on the size of the company doing the borrowing, the financial institution, the amount borrowed, and whether there is any collateral involved. A common way for companies to save money by borrowing is to take out a business line of credit. Owners can buy discounted goods or pay down high-interest obligations with the proceeds.

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