Last Updated: October 18, 2023|Categories: Personal Loans|

A personal loan is money that you borrow from a bank, credit union or online lender in which you pay back over agreed upon timeframe by a fixed monthly payment. Typically these loans can come at a lower rate than most credit card agreements and can be used in a time where savings or other funds are needed but may not be available. 

Taking out a personal loan can be helpful in a number of situations. You may need a loan to consolidate credit card debt, help start a business, assist with a home project or renovation or in times where you may need cash for medical bills or emergency situations. If approved, a personal loan can help get you cash in a timely manner no matter what your need may be.

When to Consider a Personal Loan

If you are looking for help with credit card debt, sometimes a personal loan is a great option. Not only can you consolidate multiple credit cards into one monthly payment, you can also reduce your interest rate. This is a great option for when you get behind on some bills or you have too many lines of credit open at one time with high utilization ratios. Click here to find out more about utilization rates and how they can affect you.  The great thing about a personal loan in this instance is that you can choose your payment option for how quick you would like to pay the loan back depending on how much you choose to receive and what you are approved for. 

Medical emergencies, unexpected life changes or unanticipated bills can also be a reason why you may need a personal loan. Sometimes there are necessities in life that we just couldn’t plan for and instances where your savings are insufficient or unavailable. A personal loan can help you get the money you need quickly in unexpected situations. Preparing financially for unexpected situations is always important but sometimes situations regarding money cannot be avoided. 

Bottom Line

In times where everything is costing more, overspending can sometimes become less about a want and becomes more of a need for some as we adjust to the cost of everything going up. Making adjustments can often take more time than we expect and once in a while we may fall behind more than we expected. Doing research on the right company that fits your needs and what you will be using the money for is key. It is also important to note that on time payments can build up your credit while late payments can possibly damage it so you should really make sure you understand the terms and know what is expected to take out a personal loan and pay it back.

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