A tough decision! I can only reiterate what others have said before me but if it was me in the <250hrs fATPL position I'd probably just sit tight and keep my IR current for the next year or two. Well, actually I'd look overseas for a bit of adventure, but that option doesn't suit a lot of people!
I wouldn't be looking at instructing as a means of earning money, or indeed building hours at the moment. I would personally see it as an opportunity to get maybe 10 hours a month to keep reasonably current and also to meet contacts. It will also look better a few years down the line when you go for an interview - at least it looks as though you tried to find work rather than sitting on your arse!! If you can afford 7k without taking a loan I'd say do it. If you can't - don't!!