A common piece of financial advice that many people receive is to avoid debt. People often perceive debt as the root of all financial evil. In reality, things aren’t that simple.
Many financially adept people can use debt to their advantage. One financial resource they use in this pursuit is personal loans. Personal loans are money you borrow and can use for large expenditures of all sorts.
You pay these loans back monthly, usually for 2-6 years. Depending on your circumstances, it may be a longer duration of time.
If you’re wondering whether a personal loan is right for you, read on to see five reasons why you should take out a personal loan.
1. An Unexpected Significant Expense
One of the scariest events in life is facing emergency expenses, such as a hospital bill or repairs after an accident. Unexpected events aren’t always emergencies, either.
Sometimes necessary expenses come at times when you can’t afford them. At times like these, a personal loan can do a great deal of good.
2. Building Credit
This is a beneficial use for college students or young adults who are trying to build credit. There are personal loans known as “credit builder loans” that allow you to establish a payment history.
They are also helpful if you have a weak credit score and need to build it back up. There are many online lending resources for this, including those from Bonsai Finance, which specializes in poor credit loans.
3. Financing a One-Off Purchase
Maybe you have a major one-off purchase that isn’t extreme, such as a big vacation. This could be the case if you meet the following conditions.
If your credit, income, and other factors qualify you for a much lower APR than a credit card would allow, this could be a good time for a personal loan.
If you don’t think you can pay off the APR within the standard length of time for a credit card. A personal loan would allow for a much more expansive payment period.
Of course, there’s always the possibility that the vendor doesn’t accept a credit card. In this case, a personal loan may be inevitable.
4. Financing a Wedding
Weddings are often expensive, and attempting to pay for a grand wedding on income alone is difficult. A wedding involves paying for an officiant, venue, wedding director, food, and drink for receptions.
A personal loan can be a safe, easy way to cover costs for this once-in-a-lifetime event.
5. Moving Costs
The average move can cost over $1000. If you don’t have this kind of money, a personal loan can be an effective way of covering the cost. With this, you can hire a moving crew, a moving truck, and finance other costs.
Get a Personal Loan Today
Personal loans can be a powerful financial resource in handling major life events. With manageable APR rates, these are a safer alternative to using credit cards.
Their longer payment periods can spare you significant stress and effort. If you are facing one of these expenses, get a personal loan today!