How Can I Use a Personal Loan?
When it comes to consolidating credit card debt or paying for life's big expenses such as a wedding or adoption, you have several options. You can save money and pay with cash out of pocket, borrow against your home equity if you are a homeowner with enough equity in your property, use an existing credit card, or you can take out a personal loan. The best solution depends on individual circumstances, but an increasing number of consumers find that personal loans are a good fit for managing their finances. For our purposes, we’ll discuss using cash vs. personal loans.
If you have the capacity to save enough cash for your upcoming major expense rather than borrowing, that's a lower-cost way to pay for something since you won't have any interest charges. But, not everyone can set aside that much cash, particularly when the expense isn't anticipated.
A personal loan, available in amounts from $5,000 to $50,000, with a competitive interest rate provides a solution to help meet your needs. You can also choose your repayment term and establish a recurring monthly payment that fits your budget.
Ways to use a personal loan
Personal loans can be used for a variety of reasons, including:
- Consolidating debt. A common use for a personal loan is to consolidate several high-interest credit cards to pay them off faster. Consolidating your debt not only may result in a lower interest rate, but you'll also benefit from fixed payments for a specific term and the convenience of paying one bill rather than multiple debts. According to Bankrate, the number one reason to take out a personal loan is for debt consolidation . Debt consolidation through a personal loan can be a smart and financially savvy decision that can potentially save you money every month.
- Expand your family. Whether you are having a baby or plan to adopt, there are numerous costs associated with increasing your family. These expenses may include medical bills, baby supplies, a car seat and perhaps needing to move to a larger home. According to the National Adoption Foundation (NAF), the average cost of adoption is $30,000 including the adoption itself and related expenses. A personal loan for adoption can help provide funding for your family’s needs.
- Celebrate life events. Whether you want to attend a family reunion, treat your kids to a special vacation to honor their college graduation, celebrate a special wedding anniversary or pay for your daughter or son's wedding, a personal loan can help you pay for the expenses without digging into your savings. You can repay the low-interest loan over three to seven years, allowing you to comfortably celebrate the big moments in your life.
Explore personal loan options to see if it’s the right fit for your situation and how it could help you achieve your financial goals.