Everyone’s financial situation is different and, at some point, you may find yourself needing a little monetary help. Deciding if a small loan is a good idea for you can be tricky. You don’t want to get into too much debt but a small loan may also benefit you. Here are a few examples of times when a small loan can help you.
Consolidating High Interest Credit Card Debt
If you are paying a very high interest rate on your credit card balance, you may be stuck in a credit card trap. You pay your minimum due each month but your balance keeps going higher and higher as the interest goes up and up. This can be a difficult cycle to breakout of and a perfect time to consider a personal loan to pay off that credit card.
You may be able to get a personal loans with a much lower interest rate than a credit card would offer you. This means you can take out the loan, pay off your credit card balance with the cash from the loan and then continue to pay off the loan monthly at a much lower rate. When you go this route, you will be paying off that debt in no time!
Small Loan for Home Repairs
Another time that it is a good idea to take out a small loan is when you are making home repairs but can’t access a home equity loan. If you haven’t owned your home for very long or have not paid off a significant portion of your mortgage, you may not be eligible for a traditional home equity loan. However, repairs on your home shouldn’t wait! A personal loan will get you the cash you need and quickly.
Large Financial Purchases
If you are considering making a big-ticket purchase and need cash to do so, a personal loan may be a good idea. However, funding a large purchase with a persona loan is best when you have good financial habits. This means, only use a loan to buy something extravagant like an engagement ring, a wedding or an extravagant vacation can all be funded through a personal loan but only do so if you have the discipline to make the monthly repayments on time!
Medical Procedure
A small loan may be beneficial if you need to undergo a medical procedure. Often times, doctor’s offices will offer financing but if they do not, paying for your procedure through a small loan may be a viable option. A small loan may have a better interest rate than a credit card which means it makes sense to pay for your procedure this way.
Personal loans can be beneficial in many ways. They can help you manage debt, afford large purchase and pay for unexpected things. Always consider the pros and cons to taking out small loans and decide if it is the right choice for your specific situation. When you take your time, you will definitely find the best loan for you!
