They say more money, more problems, right? Well, so does inadequate funds or a lack of money. Have you found yourself in dire need of quick cash, but no one seems to be offering a way out? The only option left is taking out a loan. In this case, a personal loan is the best option. Forget what people say about debt being bad. It’s only bad if you don’t know how to manage it. Besides, there are many benefits you can reap from loans. Take a look at some of the reasons you should take out a personal loan:
1. Debt Consolidation or Refinancing
This is one of the most common reasons why people take out personal loans. Keeping track of multiple loans can be tiring and may lead to forgetfulness, which, in turn, leads to penalties for late payments.
In addition, each loan also comes with a different interest rate and repaying the loans in this manner will cost you a lot of money in interest.
However, by refinancing or consolidating existing debts, you can avoid such inconvenience. Debt consolidation is the process of re-negotiating with your lender so they can offer you a chance to consolidate multiple loans into one at a lower interest than before.
This way, you’ll be able to pay off your debt fast. While at it, be sure to do your research before going ahead. Typically, you’ll want to go for a low interest rate loan, one with low monthly payments and large enough to hit your consolidation goals.
2. Unexpected Emergencies
Emergencies don’t knock on the door, and neither do they announce their coming. When they appear, you must attend to them, but sometimes you may be cash-strapped. At this point, consider taking out a personal loan. Some of the emergencies include:
• Home repairs that can’t wait, such as a leaking roof.
• Medical emergencies.
• Vehicle repairs that don’t fall under auto insurance.
It shouldn’t be hard to find online lenders who can offer you such loans. In fact, you can receive the funds within the same day of accepting their offer. In other instances, you may have to wait for at least 2 business days.
If you’re fast enough and apply for a personal loan as soon as the emergency hits, you should receive the funds even before you accrue any interest. Another method is to use your credit card rewards to pay for the emergency and then use the loan to offset the card debt before its due date.
3. Improve Your Score
Do you have a short credit history, bad credit, or none at all? Well, you can build up your score by taking a small personal loan of dollar 1000 each even with bad credit.
You see, credit scores are a culmination of various factors. One of them is your payment history and it accounts for 15% of the overall score. By taking out a personal loan, you have a chance of improving the score, when you pay on it. That’s the first way.
The second is by making on-time payments. This will show lenders your creditworthiness because you’ve proven to them your ability to pay back a loan.
As a result, your score will improve and in the long run, this will enable you to qualify for bigger loans in the future at a lower interest rate, which will save you money as well.
4. To Fund a Wedding
Apart from your birthday, your wedding is one of the most important days in your life.Therefore, it’s only fair that everything goes according to plan. For this to happen, you’ll need funds to buy the best tuxedo, a wedding dress, pay the DJ, the photographer and hotel reservations, etc.
As you may already know, these items are expensive and chances are you may fall short. A wedding loan can help you cover these costs instead of drying up your pocket.
After the wedding, you may have some leftover cash. Use this to fund your honeymoon to the destination of your dreams. Besides, weddings come once in a lifetime (assuming you don’t divorce and remarry), so why not make it a day to remember?
5. Pay for a Funeral
Funerals are filled with dulled, negative emotions and for good reason. Losing people close to you can be devastating and heartbreaking, to say the least, especially if they are close family members. To pile more pain to the already painful situation is the cost involved in funeral preparations.
There are situations when the affected family doesn’t have the means to bury their loved one. This includes paying for morgue services, headstones, and caskets among other costs. While it may be a period of mourning, it’s important to also consider the financial aspect of funerals.
A personal loan will ensure you bid farewell to your loved one in a respectable manner. Furthermore, you can also take out a personal loan in order to secure the money you’ll need for your own funeral. Now, this may sound absurd but think of it.By doing this, you’ll lift the burden off the people you leave behind. They won’t have to worry about money to pay for funeral expenses.
6. Buy a Car
A loan also applies to people who want to buy a boat or an RV. These machines are expensive, no doubt, and paying with cash may be very difficult.
When seeking a loan to fund your old or new car purchase, your credit score will come into play. This is what lenders look at to determine risk. You can expect this when you walk into any car dealership. They’ll structure a financing plan to help you pay for the car.
However, many people don’t know about other more favorable financing options. A personal loan, for instance, can offer you better deals than your local dealership. In the long run, this will save you a lot of money.
Furthermore, you can use some of the funds from the personal loan to cover other related costs such as insurance or new tires.
7. Pay for Moving Expenses
Moving down the street won’t cost you a lot of money. However, if you plan on moving from one city to another, then you may want to craft a budget. After drafting the budget, you’ll see the costs aren’t pocket-friendly in any way.
Moving may be due to a job opportunity or wanting to be closer to your parents. Either way, a long-distance move will require a moving company and, depending on what you have in the house, the costs can go up fast.
You need boxes, moving blankets, plastic wrap,truck rental, along with many other moving expenses. Sometimes, it’s better to hire a moving company. In other cases, you may need to buy new furniture once you reach your new location. A personal loan can come in handy when meeting these costs.
8. Fund a New Business
It’s no secret, starting a business is difficult due to inadequate capital. If you’re lucky enough to get your business off the ground, chances are it may not make it past the first year because funds may dry up. This is one of the reasons many people fear starting a new business, but it doesn’t have to be that way.
A personal loan can help you start your dream business. After the business picks up, you can repay the loan. You might also be a business owner already but lack the funds to expand your company. An unsecured personal loan can also help you overcome this obstacle.
9. Fund a Dream Vacation
Office jobs can get monotonous at some point, and when you get to this point, the only thing on your mind will be a vacation. However, you may not have enough money to fund this dream vacation. Does this mean your vacation will go up in smoke?
Not a chance because a personal loan is your knight in shining armor at such a time. You can take out one and fund your dream vacation. Take a well-deserved break and come back to work feeling fresh and rejuvenated.
10. Buy New Gadgets
The new iPhone is in the store but your pocket doesn’t seem to agree with your wants. Your close relatives won’t lend you the money, despite your pleas. Should you put off your desire for a spanking new iPhone or other tech gadget? Of course not.
Just hit the emergency button and take out a personal loan. Head out to your nearest store and get that new gadget you’ve been drooling over.
What are You Waiting for?
Highlighted in this article are some of the reasons why you may want to take out a personal loan. As long as you meet the basic requirements set by the lenders, taking out this loan should be easy. While obtaining it may be easy, it’s important to work out a repayment plan to avoid drowning in debt.
