When the going gets tough, and the tough gets going, a personal loan may help you turn things around.
Personal loans are sums of borrowed money you take when you require money to pay off emergency expenses, debt consolidations or manage large purchases.
These loans normally have to be paid back with interest which depends on the time you can pay back, ranging from a few months to a year or more. Paying back personal loans becomes easier as they offer lower interest rates than other long-term loans.
If you are unsure about when is the right time for you to take a personal loan, don’t worry. We have lined up a list of all the reasons that you should consider for personal loans.
Reason 1 – Get a Personal Loan When You Are in Need of Emergency Cash
An emergency often strikes out of nowhere when you are least prepared for it. Whether it is to cover emergency medical expenses, funeral costs, or payback home utilities and bills, taking personal loans is a good idea; much better than payday loans at the very least.
Payday loans are short term loans with very high-interest rates that could reach up to 400%. A major benefit of payday loans is that they do not require a credit check before giving loans which is one of the main reasons people opt for such loans. However, they require immediate payback when you receive your next paycheck, and the borrower often does not have enough money that now includes the high amount of interest to pay off that loan.
Personal loans are a better option in situations such as these. There are online lenders available who often approve your loans and give them within a day or two.
Reason 2 – Get a Personal Loan to Sort Out Debt Consolidation
People all over the world have huge amounts of money stuck in debt. This includes purchases, fees and interests which take several years to pay off.
Taking personal loans as debt consolidation is the most common reason people take out personal loans. You can take these loans to pay off your outstanding dues before paying back the personal loan lender later.
Another reason why these loans are popular is due to their low-interest rates. They usually charge low-interest rates, especially to people who have a good credit standing. The average interest rate is 4% which is a much lower number when compared to credit card debts.
Reason 3 – Get a Personal Loan to Finance Home Repairs and Remodelling
If you own a home and want to work on a repair or renovation project, you can take out home equity loans. Home equity loans are good and easy to take out; however, they use your house as collateral, and their security has tightened further after the outbreak of COVID-19. If you don’t want to put your house on the line, a much better alternative to home equity loans is to take out personal loans. They have lower interest rates and are easier to get without risking your house and assets in the process.
Reason 4 – Get a Personal Loan to Finance Moving Cost
Moving in the city seems a hard enough job, but when you have to move across states, many unforeseen expenses often add up, which require extra cash. Taking out a personal loan while moving can cover the cost of things such as hiring movers, transporting your belongings, paying rent and security deposit and even if you want to purchase new furniture for your brand new home.
Reason 5 – Get a Personal Loan for Vehicle Financing
Just like home equity loans, auto financing loans are also available. These loans are readily available and can be paid off in monthly instalments as well. They have lower interest rates as compared to personal loans. However, the same problem arises. Auto financing loans are also secured loans that keep your car as collateral. If you miss out on the payments, it can lead to your car being taken away from you. If you want to buy a car without taking these risks, taking personal loans is a safer and better option.
Reason 6 – Get a Personal Loan to Cover Wedding Expenses
Weddings are a one-time sacred event in life, and there is no harm in going a little overboard to celebrate yours. If you want a lavish wedding and want to make your special day extra special, a personal loan is a right choice for you.
Apart from personal loans, you also have the option of credit card debt. Credit cards have high-interest rates and fees and have a negative effect on your credit image. Taking out personal loans is a better and less expensive way to manage and cover the cost of your wedding.
The Bottom Line
There are various benefits of applying for a small loan rather than getting yourself knee-deep in a long-term loan that may take years to pay off.
When it comes to smart money management and paying off your debts on time, a personal loan can come in handy to save the day. Moreover, there are plenty of options in the market for everyone to apply for a personal loan.
Contrary to credit cards or a long-term loan, you do not always have to have a high credit score to qualify for a personal loan. Various finance services offer small loans to people with even a bad credit score. You can check the web for which services in your area are offering this facility.
Jacaranda Finance is also one of them. They make it easier for people to apply for small loans on a short-term basis. Moreover, they also offer this service to people with a bad credit score.
So, if you are still scratching your head over whether to invest in a personal loan or not, read this blog again, and you will be convinced. Good Luck!
If you have any more finance-related advice or tips to add to this blog, feel free to share them in the comments section below.