Have you ever tried to win a race? Attempted to get a high score in a videogame? Competed in a competition to win a grand prize? All these are attainable and realistic achievements if you strive to reach such goals. We all have goals in life whether it's to get a promotion at work or to win a friendly contest. When we are able to accomplish such goals whether big or small we have a sense of pride and self-worth when we surpass the competition and attain what we have been working hard towards. So why would you not set up a goal for your personal finances?
Have you thought about setting the goal to get a personal loan? What situations could cause you to get a personal loan? Why would a personal loan be of interest to you? These are all valid questions that will be discussed in this article.
First, there are many types of loans for certain financial situations some examples of loans can be a mortgage loan for a new home, an auto loan that can help buy a new car, and a student loan can be used to help pay for school tuition. How does a personal loan differ from the rest of the competition? A personal loan can be used for just about anything you set your mind to as long as the bank your lending from understands what the money is being used for and it's for legal purposes.
Of course, there are some setbacks to receiving some types of loans, for example, a mortgage loan can be of great privilege to purchasing a house yet did you know your home could be used as collateral? That means that if you fail to pay the mortgage loan they can take back the house you just purchased the same principle can go for an auto loan. But why is a personal loan so different? Personal loans usually don't have collateral and are named "unsecured" but beware the interest rate may tend to rise.
Here Are Some Examples Why You Might Want To Get A Personal Loan
1. Healing Credit Cards To Help Unload The Stress
Do you love shopping but then realize at the end of your spending spree you maxed out all of your credit cards? Now you are under a stress to pay off those debts? A personal loan can help you get out of that situation and help you to consolidate all of the expenses into one monthly payment. Now you can unwind and relax! Interesting fact about this is that while taking this route it can actually help lower the interest rate on the personal loan than the regular annual percentage rate on your credit cards.
2. Financing Your Purchases
A personal loan can help you to make a purchase but it must be decided of it is a 'need' or a 'want'. If you were to receive the personal loan it would be wise to pay the seller in cash instead of financing through the seller. Be careful not to rush into a quick financial decision because you could make the wrong decision and make a finance a nightmare for you. Ask questions to the seller for an offer and compare it to any personal loans you might have in mind already then you can decide on what financial course you want to take. After all, you are the one in control of your money.
3. Preparing For Marriage?
Can you hear the wedding bells jingle? But is your wallet prepared for such a heavy load? Don't stress out too much! A personal loan can qualify to help with any large event such as a wedding. Sit back and relax! This can help you to save a large amount on interest charges given it has a lower interest rate than your credit card.
4 Repairing Your Credit Score And Not Giving Yourself A Credit Scare
A personal loan can help heal your credit score in three ways:
A. If your credit report shows that you have credit card debt, a personal loan might help your "account mix". Having different types of loans is very helpful to your credit score.
B. It may help lower your credit utilization ratio- a credit utilization ratio is when the percentage of a borrower's total available credit that is currently being used. So the lower the amount of your total credit the better the score. Lowering the credit utilization ratio can help a borrower to improve their credit score. A personal loan increases the total amount you have available to use.
C. Paying back the loan on time is essential! Time is money so paying on time is very crucial this will help you with your credit scores.
In conclusion, always do your research and take your time. With every goal in life, it takes effort and hard work to be successful. Personal loans are a big responsibility and can be a useful tool financially to help you but under the right circumstances. Talk to a financial advisor and weigh out all your options before settling in on a deal. Remember it has to be under the right circumstances so timing is key. Whether your about to get married, healing old credit card debts or repairing your credit score a personal loan can lend a hand. Set your financial goals by first considering why a personal loan might be the best option and reach that goal by taking the proper steps.