6 reasons to get a personal loan
In a dream world, we'd never need to worry about expenses popping up and we'd be able to pay things off quickly and without worry. However, that isn't always possible for everyone. Sometimes it's necessary to borrow a little money to keep our lives going, and there's no shame in that! Personal loans exist just for this reason, and can really help you out when you're in a bind. Read on to learn more about personal loans, and the reasons to look into getting one for yourself.
What is a Personal Loan?
When you get a personal loan, you're borrowing a certain amount of money and paying off the lender over the time with interest. In order to get a personal loan, you don't have to put up any collateral, so they're called "unsecured" loans. Instead, creditors use your personal credit history to determine if you're eligible for a loan, and how much you can borrow. Like other types of loans, the concept is simple. You borrow money and pay it back later. Unlike specific types of loans like mortgages and car loans, though, what you do with the money is up to you.
Reasons to get a Personal Loan
Planned and unplanned expenses come up throughout our lives, and if you don't have a lot of savings set aside, you might feel overwhelmed. Personal loans can help with the examples listed below:
- Wedding - it's no secret that weddings are one of the biggest investments a person can make. Between flowers, dresses, catering, music, and photography, weddings can end up costing tens of thousands of dollars (and this isn't even including the honeymoon!). Of course, everyone wants to start their marriage off on the right foot by celebrating with their friends and loved ones, but finding a way to pay for it can be a nightmare. The expenses involved in a wedding add up quickly, and even the best-laid plans can sometimes end up not working out. Even if you have your wedding budget planned out down to the penny, there will probably be an unexpected cost. A personal loan can give you a little more wiggle room so that you can make your wedding the perfect start to a wonderful future!
- Consolidating Debt - if you find yourself drowning in high-interest debt from multiple sources (i.e. car loans, credit cards, payday loans, etc.), getting a personal loan can really take some weight off your shoulders. A personal loan with a lower interest rate than your other debts can actually end up saving you money. Use the money from your loan to pay off other, more crushing debts, and it will simplify your life. Instead of having to make payments to multiple creditors, you'll be able to make one simple payment a month, without struggling to pay off that high interest. If you crunch the numbers, it can actually be shocking to see how much you'll save.
- Home Improvements - sometimes home upgrades are a necessity. Old applicances can break, your roof can leak, plumbing may malfunction, or an HVAC unit can break in the middle of a sweltering heat wave. And these problems are likely to cost you thousands! Instead of suffering through it, you can take out a personal loan to pay for the necessary improvements. It can also be a good idea to upgrade your home to boost its value, especially if you're looking to sell. And improvements like solar panels or energy-efficient doors and windows can end up saving you money on your monthly energy bills in the long term. While home equity loans can sometimes have a lower interest rate, equity isn't required for a personal loan, which means you don't have to worry about losing your house if you're unable to make a payment.
- Medical Reasons - you shouldn't have to go into debt for medical reasons, but for so many Americans, it's a reality. In fact, medical debt is the number one reason for bankruptcy in America. If you find out you're sick or injured, and you need to undergo a procedure, you don't have to put it off if you realize you don't have the money available. With a personal loan, you can take out exactly how much you need, and pay it back within a set amount of time.
- Vacations - a fun and relaxing getaway is an absolute must every now and then. If you have the time and opportunity to take the trip of a lifetime, but the finances just don't seem feasible, a personal loan is a perfect solution. Vacations give you a much-needed respite from the daily grind, and you'll make memories that will last forever. Get your passport, pack your bags, and plan that ultimate trip for you or your family while you still can.
- Major Purchases - there are plenty of larger purchases you'd like to make, and sometimes big expenses come up. Expensive car repairs, for example, can be a huge headache. Or maybe you want to buy a car and just can't get approved for a car loan. Perhaps you've had your eye on that boar or RV? Whatever you're looking to buy, a personal loan might be able to help you make that a reality.
A personal loan can be a great option instead of using a credit card, because you have a set time to pay it off, and your payment will always be the same from month to month. Credit card debt is ambiguous, and with interest rates soaring into the double digits, you may feel like you'll never pay it off. But when you get a personal loan, the terms of the loan will help you see the light at the end of the tunnel. With personal loans, you can get thousands of dollars to use towards your expense, with the guarantee that, as long as you make payments on time, your debt will be gone in a set amount of time. Not to mention that the interest rates on personal loans are often lower than those on credit cards.
Whether you're looking to buy that new fridge, take that trip, or finally tie the knot, don't put it off any longer because of money issues!