Reasons You May Need a Personal Loan

Did you know a personal loan can be used for many reasons? It could be an excellent resource to help you finance unexpected or planned life events and situations. A personal loan allows you to borrow money at a fixed interest rate and repay it within a specific time period. There are two common types of personal loans - unsecured and secured. However, most personal loans are unsecured, which means there’s no collateral required, and it can be used for almost anything.

Debt consolidation.

Are you looking for a better way to manage multiple credit cards and other debt? A personal loan may be the solution to consolidate your debt. Debt consolidation allows you to combine your debt so you’ll have one monthly payment at a fixed rate instead of making multiple payments at various interest rates. The interest rate is usually lower on a personal loan, and you could save money. Taking this approach to pay off debt works best when you limit your credit card usage so that you don’t accumulate more debt. 

Alternative to a payday loan. 

Payday loans typically have high interest rates and short repayment periods. The short repayment period coupled with high interest rates can make these options more expensive than expected. Personal loans can offer an alternative with more extended repayment periods and generally cost much less than the typical payday loan. 

Emergency expenses. 

Life happens, an unexpected visit to the emergency room or your car breaking down can cause unexpected expenses - sometimes in the thousands. If you don't have the extra money to pay for these types of costly emergencies, a personal loan may be the answer and provide the funds you need to cover the costs. 

Home improvement project.

It’s not if, but when it happens – a broken dishwasher, a leaking water pipe, or a running toilet. Maybe it’s time to upgrade your kitchen cabinets. A personal loan could be a good option for a much-needed home repair or upgrade. You can take out a home equity loan or home equity line of credit, but with these types of loans, you have to use your home as collateral and potentially pay additional costs to obtain the loan. However, with a personal loan, you don’t have to use collateral to take out the loan. 

Wedding cost.

According to The Knot, the average cost of a wedding in South Carolina is $30,600. This could seem overwhelming, especially if you haven’t saved up for your big day. However, with a personal loan, you could possibly have the wedding of your dreams. First, create a budget and decide what you want for your wedding. You may wish to have the best of the best, but be realistic about how much you can afford to borrow and repay. 

If you’re in a situation where you need extra money to pay for an unforeseen circumstance or consolidate debt, a personal loan may be a good option. However, before you decide to borrow the money, its always good to know your options.