When Are Personal Loans a Good Idea?
Most people do not realize how a personal loan works. They can actually be a great tool and option in a variety of ways. Actually personal loans are usually unsecured. This means their is no collateral used when getting a personal loan. Today we are going to explain when are personal loans a good idea.
Can I Pay Off Credit Cards Using a Personal Loan?
Credit card debt seems like it just kind of sneaks up on you. You try to keep the balances paid down, but unexpected things like a car repair can throw things out of balance. Once your credit cards start getting too overloaded in combination with higher interest rates, it can be extremely hard to pay them off.
One solution is to apply for an unsecured personal loan. The advantage is you can get the personal loan with a fixed rate payment that you can pay over time. Once you pay it off, you’re done. It also allows you to then put away your credit cards and get back on track.
Are Personal Loans a Good Idea to Consolidate Debt?
Another great option for using personal loans is to consolidate your debt. This debt can be from other loans or even medical expenses. It can also include credit card debt or balances on auto loans. Sometimes if you add up all of these payments it can destroy your monthly cash flow.
By applying for a personal loan with an online application you can borrow up to $40,000 to pay off and consolidate all of your debt. You will then just pay one payment for 3 – 5 years. This payment will usually be much smaller than all of the debt payments added up together. This can alleviate the issue of not having enough cash left over each month to pay bills and to save for unexpected emergencies.
Can I Use a Personal Loan to Buy a Car?
Many time people want to know when personal loans are a good idea. Well when purchasing a vehicle it can be a smart idea. The reason is when you find a car you want, especially at the dealer they will want to give you financing. Many times you are stuck waiting for them to approve you and sometimes it can be at a higher interest rate.
You have already spent a lot of time just searching for a car and now you have to deal with financing. On top of that the car will be held as collateral until you pay off the car loan.
With a personal loan you will already have the cash in the bank and can just focus on negotiating the price of the car. The personal loan is unsecured and you can just pay cash for the vehicle. This way you will not have to screw around with a financing department thereby delaying the purchase even longer.
Home Repairs and Improvements
When you first buy a home it might be a fixer upper and you will need money for repairs.
You may also want to do improvements to the home such as a new kitchen or bath remodel.
A personal loan can be a great option instead of having to take out a home equity loan. Remember, the home equity loan will use your home as collateral. The personal loan will be unsecured and usually a much quicker process to get approved.
Where Can I Apply Online For a Personal Loan?
Applying online with a lending network can be a great idea. You just fill out one easy form. You can visit PersonalLoans.com to fill out the online application.
Another cool option is to use a Peer-to-peer lender. This is where individual investors fund your loan. You will fill out a simple form and then get a proposed rate and terms. Once you accept your loan will be funded. Once fully funded the loan amount is direct deposited into your account. It is that easy. You can apply by visiting LendingClub.com.
Either of these are great options and if approved, can give you the money you need for any large type of purchase or debt consolidation.