Should you apply for a personal loan? The answer depends on your needs. If you badly needed cash, but you don’t have any assets or credit card, then a personal loan is advisable. This is because cash withdrawal through your credit card is expensive than a personal loan. However, if you have assets like gold, property, or shares, then you can have a loan against these assets.
These loans will be able to offer you lower interest rates.
Indeed, if you need money without going through a tedious process, then the personal loan is the best solution for you. This will provide you with cash without having to explain the reason why you need to have the loan. You can easily get them even within 24 hours. You just have to fill out the application form and you can have the check or the money at your account.
However, before rushing out to get a personal loan, you must understand its pros and cons. With this, you can have an informed decision regarding what you are committing:
Pros of a Personal Loan
Easy Money During Emergencies
Imagine you received a large bill unexpectedly. Perhaps, a family member has been rushed to the hospital. Sometimes, you need money to have major repairs in your home. As such, a personal loan can be a very useful way to have access to a huge amount of money in a short period.
Some people might consider this as the only place that they can turn to if they don’t have enough credit or they don’t have assets. Check out this site and get a personal loan today.
Consolidating Existing Debt
Debts can be a traumatic state to be. Ultimately, you will find out that the bills pile up fast as does your stress. If you have one or more sources of debt, then a personal loan can be a good way to consolidate your bills. Indeed, this will help you get back on your feet. The interest rate on a personal loan is lower than that of a credit card. For example, if you are paying off one or more credit cards, the interest rate is higher compared to a personal loan.
The Rates are Reasonable
Once again, personal loans are cheaper than credit card borrowing. If you are a borrower with a good credit score, the interest rates can be as low as 5% APR. However, credit cards would usually charge at least 13% APR even for creditworthy customers.
Versatile Loan
Unlike a student loan, mortgage, or car loan, a personal loan can be used for various purposes. You can use it to pay for medical bills, car repairs, consolidate your credit card debts, or go on your dream vacation. Indeed, it can finance whatever you need. However, just because you can use a personal loan for anything doesn’t mean that you should. Check out this site and get a personal loan today.
Help you Invest in Yourself
Indeed, not all expenses must be paid for with a personal loan. There are many reasonable uses for this one.
You can use it to ace an interview for a job abroad and pay for your move. When you borrow money, you can cover the costs. Perhaps your new salary is enough to pay for the loan.
If you decide to continue your education, personal loans can help. It can help you finance your undergraduate or post-graduate degrees. Furthermore, you can use personal loans to pay for a class, certification, or conference that you can use to be promoted at work. However, before you resort to borrowing, make sure that you ask your employer to pay the program. Ask if you can get a payment plan with the organisation that offers it.
Finally, you can have personal loans for starting a business. If you have good credit, you can find out that a personal loan is the cheapest way to fund your small business. Before you sign the contract, make sure that you create a repayment plan that will not interfere with the success of your business.
Cons of a Personal Loan
Accumulate Unnecessary Debt
Since personal loans will not limit what you can do with the money, you may be buried into debt for something that you don’t need. Furthermore, you could end up borrowing more than what you can afford. However, lenders today try to avoid this by checking your existing debts and expenses.
Come with High-Interest Rates
To get qualified from personal loans, your credit score must be good. You also must have a good debt-to-income ratio. Without these numbers, you can have high-interest rates. These rates can be as high as 35% from reputable lenders.
Get Trapped in a Debt Cycle
If you will have a personal loan for debt consolidation, remember that you still have old debt. However, it will just look different. If you use your personal loan to wipe out your credit card debt, you will start charging big balances again. As such, you will be trapped in an endless cycle of debt. Discover more about instant loan and find the best personal loan here.
