Home improvements paid for with a personal loan.
Personal Finance

The Versatile Personal Loan

A personal loan is an extremely versatile form of financing. These loans are the Swiss Army knife of lending products in that you can use them to solve a number of problems and pay for many different expenses. If you are thinking about a personal loan, let’s take a look at some of the most common reasons that people apply for one.

The Versatile Loan

A personal loan can be used to handle a number of different financial problems and to finance any number of expenses. With this type of loan, your lender is giving you money based on your qualifications, not on the loan use.  This means that they can be used for just about any purpose that you like. In addition, most personal loans will be unsecured, meaning that you do not have to use any property purchased as collateral.

So, what are people using these loans for? Have a look.

Consolidating High Interest Debt

Debt consolidation is one of the best and most common uses for a personal loan.

If you have 3000 dollars or more in credit card debt, a debt consolidation loan should be a real consideration. Just like the name suggests, “debt consolidation” will allow you to combine all of your debt into one lower interest loan. This has a number of advantages.

The chief advantage is that you save money on interest. With average credit card interest being around 20 percent, it is not hard to see how moving all of that debt to a single digit interest loan can help. It can easily save you hundreds of dollars in interest over the course of a year, making it easier to pay down debt.

Another benefit is that it making your payments will be easier. Instead of having your debt spread out over several accounts, it can all be “consolidated” into one account. This means just one payment to keep up with.

Making Home Improvements Or Repairs

Another great use for a personal loan is for home improvements.

Major improvement projects like bath and kitchen remodels can cost tens of thousands of dollars. Personal loans can give you the money to pay for these projects when a HELOC  or home equity loan is no an option. A HELOC or home equity loan is a great way to pay for home repairs, but you have to have equity to qualify. There is no such requirement with a personal loan.

You do not even have to use a contractor for your home project, since your lender would pay you directly. Use your home improvement expertise to finance tools that you need to make your repairs and save thousands over the cost of using a contractor.

Paying For Emergencies

Emergencies happen and when they do, cash is usually the answer.

A personal loan can be used to pay for emergencies like unexpected medical bills or vehicle engine repairs. One of the reasons that they are so perfect for this type of expense is that they fund quickly. If approved, lenders will often be able to fund your loan in as little as one business day.

Just apply for a loan and, if the terms are good, accept your offer online. Your lender will then deposit funds directly into your bank account so that you can handle whatever emergency life has thrown at you.

Making A Move

Moves are expensive. Whether they be local moves or cross country, costs can add up quick, but a loan can help.

Local moves can easily cost close to a thousand dollars, if you do all of the work yourself. If you need to move cross country or hire professional movers, a move can go into the thousands quickly. A long distance move can easily cost 5000 dollars to 10,000 dollars. Ideally, your new employer will be paying for an expensive move like this, but even if they are, they will usually only reimburse you. This means that you need to come out of pocket for your loan expenses and a personal loan can help. Simply get a personal loan, pay for your move and then pay the loan off when you get reimbursed by your employer.

As A Payday Loan Alternative

Payday loans are an extremely expensive form of financing, but they serve a purpose. For many people, they can be the only source of emergency funding.

If you have bad credit, a payday loan can solve your problems, but a personal loan is often a better solution. Personal loans will usually have better interest and they can be had for larger dollar amounts. They will also have longer loan terms which may help you get back on track financially.

Even if you have bad credit, a personal loan still may be an option. Many of the lenders out there specialize in working with bad credit. If you are considering a payday loan, try for a personal loan first. You might be pleasantly surprised at what you qualify for.

To Pay For A Dream Wedding

Most people will only get one chance at a dream wedding, and a personal loan can help you create one. With the average wedding costing well over 20,000 dollars, it is no wonder that people need some financial help for that special day.

The great thing about a personal loan in this situation is that you do not have to raid your personal savings and you do not have to settle for something that is less than perfect. Make your wedding as big as you like, choose the greatest venue and even use your loan to buy the perfect wedding dress. A personal loan can take the stress out of your wedding and then allow you to pay back the money over time.