system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5:Doesn't the existence of loans just make things more expensive?

Am I right in thinking that the fact loans exist for companies, people schools and so on just means that the cost of things (labour, computers, houses etc) are more expensive?

Edit: I have marked this as explained as there are good arguments for and against and that as it is down to correlations you can't really prove it either way. Thank you all.
gpt
Not necessarily - Some things just cost a lot; without loans to finance them, they wouldn't cost *less*, they simply wouldn't exist except for the fabulously wealthy.

And even if you can pay cash, you still need to weight the opportunity cost of spending that money against the benefit you will obtain by alternative uses of the same funds - Case in point, buying a house.  Over the past few years, you could get mortgages in the 3-4% range, while the stock market averages 7-8% per year (over time - not guaranteed to do that *every* year).  Paying off a 4% mortgage early, then (or worse, buying with cash ourtright), amounts to nothing but wasted profit for the difference between the loan rate and the market return.