A loan should never be applied for willy-nilly, and of course, any sensible person will want to make sure they are getting the right one for the right reasons.
A loan is a big responsibility, so careful thought and consideration is always advised. A financial adviser would tell you to rely on savings before you rely on credit, but this isn’t always possible. Many people do not have savings to use when a sudden expense is needed.
This loan could be with you for a while – so it is vital you are happy with the interest rates, repayment terms and overall cost of the lone. If you are in a good position to take on a loan, then this type of credit could really give you the help you need.
So what are the top reasons for taking out a loan in 2019?
For Home Improvement
More and more people are into their interior home designs, extensions, kitchen renovations and so on. Home improvements are the top of many people’s lists. You might want to add some extras or extend your home so that you increase the sale price in the future. You may have had to repair your house in some way, like after a big leak, which your insurance can’t cover, and need access to cash quickly. Personal loans can be handy because after approval, you can usually get the money in your account within a few days.
Loans for a New Car
Sometimes the finance options available to you from the car dealership aren’t always as good as personal loan interest rates, so for some people it can make sense to apply for an online personal loan when they need a new car. In many cases, you can also adjust your repayments to suit you. For example, Wonga says:
“Depending on who you take out your loan with you will encounter varying degrees of flexible repayment periods, which means you have greater control in creating a payment plan that works for you. Most ‘instalment loans’ are repaid through 6 monthly payments, which allows consumers to create a manageable monthly budget as you’ll know exactly how much you’ll need to repay and when it’s due.”
This means you can be more hands-on and in control of your finances.
For Weddings or Engagement Rings
Looking to get hitched, but short on cash? Magnify Money says,
“although it’s not ideal…people take out a personal loan to finance a large purchase, such as an engagement ring or wedding…You probably don’t want to buy a big-ticket item like that on credit, but (some) people do that just because it was cheaper than credit cards.”
This only makes sense if you have an excellent credit record and can repay the loan back quickly.
For Debt Consolidation
Debt consolidation is an ideal way of combining any money you owe to different creditors into just one loan. This can really tidy up your finances, as this means you can substitute several monthly payments for just one, to a single loan provider.
Loans for Holidays
In need of a break? Be careful you don’t overspend, but many people use a one to afford a trip away. You will need to know what to budget for this vacation, and when it comes to paying the money back – make sure you can afford these repayments and the holiday is really worth the extra loan payments in the long run.