A personal loan can be a wise choice if you’re looking to gain control of monthly bills or make important or emergency purchases in a responsible way. Such a loan can be especially useful if you want to eliminate higher-interest debt or to pay for large purchases in small, regular installments.
At a time when many Americans are simply trying to make ends meet, a personal loan can offer a convenient solution to several financial challenges. Here are three common scenarios in which taking out a personal loan can be a smart solution.
You want to pay off high-interest debt such as a payday or car title loan.
As a result of a past financial emergency, you might have had to take on a loan or other debt at extremely high interest rates. If that is the case, our SEIU Personal Loan might be the correct product for you as it features a fixed rate and set term that will not change. In addition, consolidating multiple debts into one personal loan can simplify your finances substantially and may allow you to save on your monthly loan payments.
You want to avoid the “minimum” trap.
Personal loan payments are structured so you can pay off your debt efficiently and affordably, which can save you money. The reason: each payment you make goes toward interest and principal. Putting money toward the principal right from the start can avoid extending the life of your loan, which helps keep the cost of borrowing from ballooning as can happen when a big expense is placed on a credit card as the minimum payments contribute only a small amount to reducing the principle owed to the bank,, which means your debt can keep piling up.
You want to stick to a budget.
The payment terms on a personal loan are fixed, which makes it easier to find a repayment schedule that works for your budget. This makes a personal loan a convenient way to deal with unplanned expenses, such as medical or dental bills, home repairs or automotive fixes.
You also can use a personal loan to spread out the cost of major expenditures, such as funding a wedding or buying new appliances, in a way that can help you stick to your budget.