As recent events have proved, emergencies of all sorts can pop up without much warning. Being able to respond to financial issues with flexibility and smart planning is key. One way many people have addressed financial freedom is through personal loans. According to statistics, more than 20 percent of Americans currently have a personal loan.
What is the benefit of obtaining a personal loan? The ability to get money you may need without having to go through a complex loan process through a bank or other financial institution. When are loans a good option to use? Individual reasons may vary, but these loans don’t require any collateral to acquire money, making it a better, more affordable loan for those without a home or other large asset to put up.
Here are the top 10 reasons to get a personal loan:
Many people, faced with multiple credit cards and other expenses, turn to debt consolidation as a way to combine a number of debts into one monthly payment, making it easier to pay off outstanding balances and avoid falling into more serious financial straits. A personal loan is a great way to pay off credit card debt due to lower interest rates. Consolidation via a personal loan helps create a set time frame in which to pay off debts.
Personal loan prequalification is a relatively easy process. Credit score, payment history and source of income will be taken into account by the lender. Red flags in any of those categories will lead to higher interest rates. Prequalify for personal loans directly with lenders through their website or in person, but make sure they will prequalify without performing a hard credit check, which can affect your overall score.
Have you been putting off that major home renovation project for years because of cost concerns? A personal loan is an ideal way to get an infusion of cash to help kickstart important home upgrades like electrical or plumbing repairs without having to take out a home equity line of credit or loan.
When you need to (borrow money now), you don’t have time to go through an extended approval process for a traditional loan. One of the biggest benefits of personal loans is that they can be approved in just 24 hours and even as fast as 30 minutes in some cases. This can give you the opportunity to quickly address any kind of unexpected financial situation that may have developed.
Personal loans can be a better option when it comes to securing money to cover debts or address expenses. Payday loans often have onerous payback terms and don’t offer protection to the person receiving money. Credit cards have higher interest rates and can serve as a gateway to more debt. Most personal loans have fixed interest rates, which helps you pay back the loan faster since payments will be the same every month.
If your refrigerator or washer/dryer suddenly kicks the bucket and you don’t have the funds to buy a replacement, an (affordable loan) is an ideal way to get money now to purchase a large item that you need as soon as possible. The easy repayment plans make it simple and cost-effective to clear the debt over time.
Entrepreneurship is something that is admired in this country, and statistics show that nearly 75 percent of small business owners used some sort of financing to help keep their operations going. Keeping a steady cash flow in a start up or getting an influx of money to get your business off the ground is critical. Often, small business owners can find it difficult for traditional lenders to support their business ideas. Personal loans are a way to provide much-needed capital in your venture.
While these may seem like a surprising use of a personal loan, wedding costs continue to skyrocket, with the average expense for a wedding now more than $30,000. If you want to help make the day magical for the newlyweds, you might want to consider a personal loan to help pay for the ceremony.
If a long-distance or sudden move is in your future, a personal loan could help offset some of the costs and allow you to cover the expense of moving your belongings. The average cost of a long-distance move is almost $5,000, and if you must buy new furniture or transport your vehicle, those figures only increase.
