Why You Should Get a Personal Loan
A personal loan is a loan agreed upon with a bank or other lenders for a borrower’s personal needs. It is also referred to as an “unsecured” loan due to the fact it is not secured against any assets like a house or car. Sometimes, when you will need funds for one purpose or another, such as creating or expanding your business, paying medical expenses, paying for your kids’ school fees, getting repairs for your vehicle, paying your rent, and a lot more. Personal loans can be the best option for instances like these. Here are some of the top reasons to get a personal loan.
Get Installment Payments
With a personal loan, you are lent a specific sum of money for a given period of time, and pay for it in regular monthly installments. The rate that will be provide will depend on your credit history and credit score. A personal loan can be the best alternative if you want to consolidate your existing debt, such as credit card. It is considered as refinancing, so you may be able to decrease your monthly payment and interest rate.
Receive Lower Interest Rates
If your credit card balances and interest rates are extremely high, a personal loan may be the ideal option when you are considering debt consolidation. Depending on how much you are qualified to borrow, a personal loan can consolidate your credit card balance into your personal loan with a lower interest rate and lower monthly payment cost. Interest rates for personal loans are definitely lower than credit card cash advances or “quick cash” payday loans.
Fixed interest rates generate stability. A personal loan provides you a lump sum of money at the onset, which you can pay back over a specified term – generally spanning one to five years. Loan rates can also be negotiable, which is one of the popular reasons why people would like a personal loan over a credit card. Another reason is that when the loan agreement is signed, the interest rate is fixed for the whole repayment period. This signifies that your interest rate will not change and your payments will remain the same.
Boost Your Credit Score
If diversity is not present in the kinds of credit you maintain, a personal loan may be a a good idea. Personal loans are one component of your credit score when it comes to the types of accounts you have. Revolving accounts, like credit cards, are only one type of credit. These accounts signify that you can effectively manage loans that are not paid off on a regular basis.