There are many reasons as well as advantages to taking out a personal loan. However, you should know whether your reason to do so is a valid one. You do not want to accumulate debt because you wanted to buy the latest smartphone. Let’s take a look at some cases when you should really consider taking out a personal loan. Informing yourself properly is key to making the right financial decision. So do plenty of research before you commit yourself to any kind of loan.
1. Consolidate Debt
Many people find themselves in serious financial trouble because they took out several loans and maybe even have credit card debt. Those interest rates really like to pile up and if you are in such a situation, you can find yourself in serious debt. This is one of the cases where a personal loan can save you. But won’t another loan just hurt you more and add more debt? Not in this case. You take out a personal loan with the purpose to consolidate debt. You pay off all your debts with this loan and you no longer have to worry about different interest rates and different payment deadlines that you might otherwise miss. It’s much easier to pay back on one single loan and keep track of it.
2. Credit Card Payments
Why use a personal loan to pay off a credit card debt? Interest rates! Credit card debt always comes with heavy interest rates. Because of the rates you can end up spending a lot of time paying off your credit card instead of saving some money. So take out a personal loan to get rid of that debt. “Won’t I just have a new debt then?” you ask? Yes, you will, but with a significantly lesser interest rate. You pay off your credit card with one payment and then you pay off your personal loan with a much smaller interest rate.
3. Wedding Costs
A previously mentioned, personal loans don’t have a sky-high interest rate. So if you find yourself in need of funding for your wedding, just go for it. With a personal loan, you can pay for the venue, the photographer and everything you can think of. Making monthly payments to pay off the loan is easier than coming up with a large sum of money for the wedding.
4. Home Remodelling
A personal loan is perfect for the job. You need to fix your roof or you want to install solar panels? No problem, this kind of loan can make it much easier than getting a home equity line for credit. There’s no need to wait for a year to save up money for that leak in your roof. Get a personal loan, fix the problem, then pay it back over a few months.
5. Moving Expenses
If you’re moving long-distance you might need a personal loan to cover the expenses. You can use this type of loan to pay for shipping or even to buy new furniture for your new home. However, make sure your new job will be enough to cover the loan.16 comments