A personal loan is a loan that you take out for personal reasons and you are usually free to do with the money what you see fit. Sometimes lenders would restrict what you can do with the money but still, you have relative freedom as to how you use the funds. Personal loans is normally not harder to obtain than credit cards but you might need to fulfil a set of requirements before you can apply for one.
Why take out a personal loan?
- Many consumers take out personal loans to cover for their credit card debt. The reason for it is that often the interest rate on a personal loan is lower than the average interest on the credit card and it is easier to make one monthly payment instead of several in case you have several credit cards where you need to pay off debt. It is, however, only interesting in the aforementioned case. If your credit rating is good, you can apply for a zero per cent balance transfer card and you will be better off using that card.
- Many student loans have high-interest rates, so many people are tempted to take out a personal loan to cover for their student loans. But beware: personal loans might have lower interest rates, but they do not have the same tax advantages as many of the recognized federal student loans. It’s a good idea to talk to a tax consultant before you take out a personal loan for this reason.
- You might need some extra money to pay for an item or an event, e.g. a new electric appliance or a wedding, and don’t have enough savings that would cover that expense. A personal loan might be a solution for this, but it is a good idea to see if it is not more interesting to cover this expense with your credit card.
The best benefits for you are Banks and financial institutions can offer this loan at a lower interest rate as compared to repayment of Credit Card or Credit Card Loan is significantly lower, if you have a good credit score.
Even if you have a bad credit score many companies will grant you a loan. Also you will be notified within minutes if you are approved for a loan. We are connected to hundreds of lenders, that means we will provide the best deal for you. By clicking on the button below. You can quickly check if you qualify.
Read more about personal loans here.