The Most Frequent Uses of Personal Loans
A personal loan is a way to make significant things happen. It can help you take control of your finances and streamline your debt, or finance something big. If you’re curious about the most common uses of personal loans, or how they work, here’s what you need to know.
So, what could you use a personal loan for?
1. Consolidate your debt
Many of us have debts, whether that is university fees or going over your credit card limit. And when we have lots of different debts, things can get complicated – especially when missing payments means paying penalties.
You could take control of your debt by rolling it all into one personal loan. This is known as debt consolidation. Personal loans generally have a lower interest rate than credit cards, which means you might be able to pay your debt down faster. Personal loans can also help you resist the temptation to go on a spending spree because there’s no linked credit card.
2. Purchase a new or used car
It can take a long time to save for a car. One way to get behind the wheel sooner is to buy a car with a personal loan and pay it off each month. With a fixed rate on your personal loan, you’ll know exactly what your regular repayments will be and how long you have to pay the loan off.
It’s a good idea to get approval for your car loan before you start looking for a car. That way, you’ll know how much you can spend and you might even be able to negotiate the price of the car.
3. Finance your holiday
There are some experiences in life that only happen once, like an overseas trip with friends, a honeymoon, or a reunion on the other side of the world. This is where a personal loan can make all the difference and help you cover upfront costs.
If you’re looking to go away with the family or a group of friends, you might be looking to book in advance to get the best deals. However, you may not have the funds at that current moment. A personal loan could help you pay for a holiday, and have a sturdy repayment plan that you can follow.
4. Planning your wedding
Your wedding is an experience you’ll remember forever, but budgets can often be blown out for the big day. A personal loan could come in handy when it comes to budgeting and knowing how much you have to spend. Paying with a personal loan might also mean that you pay less on interest than if you were paying with a credit card.
Weddings are expensive to organise and put together, as we know that the average cost of a wedding in 2019 was between £25,000 to £30,000. So, having a personal loan could help you finance that in a better and timely fashion if you’re unable to afford all the costs in one big chunk.
5. Get home improvements underway
Is it time to landscape the garden or upgrade the kitchen? Depending on the size of the project and your budget, a personal loan could help you get your home renovations underway sooner rather than later.
Home improvements can be as little as fixing a crack in a wall or as large as adding an extension onto your home. Whichever it is, a personal loan could give you that little boost you need to get everything under wraps.