Every day, people are taking out personal loans for various reasons. Most of the time, people use personal loans to pay for necessities such as food. But, you can also use it to finance large purchases and consolidate your debt. The following are the top 7 reasons why you should apply for personal loans.
Consolidate Credit Card Debt
Many people suffer from credit card debts which cause them to be stuck in their finances for many years. You can take a personal loan to consolidate your credit card debts so that you can pay them back faster. Many personal loans would help you disburse the outstanding balance you owe to the respective creditors automatically. It is easier to repay when you consolidate your debt because you are grouping them into a single monthly payment. It prevents you from having to remember so many due dates.
Alternative to Payday Loans
A personal loan is a great alternative to a payday loan. Payday loans can offer fast cash but the interest charges are over 300 percent. A personal loan is cheaper because it can only charge a maximum interest rate of 36 percent. Personal loans offer the ability to repay your loan in 2 – 7 years. It gives you much more time to make the repayment compared to a payday loan. Payday loans often require the borrowers to make the repayment in 2 – 4 weeks.
Personal loans can be used for financing the purchase of a vehicle such as a car, motorcycle, boat, and RV. You can use a personal loan to buy a vehicle directly from the consumer. It is better to use a personal loan to buy a new vehicle rather than depleting the savings in your account. It is suitable for financing the entire or part of the cost of the car. It is important to visit loan websites to compare interest rates.
Remodel Your Home
With a personal loan, you can borrow up to $35,000 which is enough for carrying out a small home remodeling. Using a personal loan to remodel your home is a wise step if you don’t have home equity. Home equity requires you to use your home as collateral which can put you in a risky position. However, if you default, it can be sent to collection and the record can stay for up to 7 years.
Accommodate Your Moving Cost
Personal loans can be used to accommodate moving costs. The cost of hiring a moving truck can be more than a thousand dollars for a short-distance move. It can cost 5 times more if it is a long-distance move. With the funds from personal loans, you will be able to purchase new furniture and hire a company to transport your vehicle to a distant area that you are relocating.
Pay Off Your Medical Bills
Personal loans are suitable for paying off medical bills because the funds can be disbursed quickly. You may need to go through an operation that requires a significant amount of money. In this case, you can apply for a personal loan to pay for the operation cost. This can give you a chance to fully recover from your illness and continue living a normal life.
You can use personal loans to fund appliance purchases. Your refrigerator just recently broke down and you need a new refrigerator. You decide you want to buy a better refrigerator to replace the old one. You can use a personal loan to buy the refrigerator and repay it with the money you earn from working. Your kid is telling you to buy a gaming computer for his birthday. You can use a personal loan to buy the gaming computer to avoid upsetting him.