There is this perceived misconception in our society where taking a personal loan is a bad thing. We grow up to have this belief that borrowing money is bad and if you apply for a loan, it is implied that you’re short on income or possibly in tons debt.
We’re here to debunk these myths. There can be various reasons behind a loan application, and not all of them are because you’ve hit a dead end. Taking out a personal loan can even spare the added stress of tough financial concerns if it is carefully planned and well-executed:
Help Out Your Loved Ones
Perhaps a close relative of yours just got retrenched or lost his home, and you yearn to lend him a helping hand so he can get back on his feet. Your first instinct might be to lend him some cash out of your pool of dispensable money. However, the more practical option here is to actually take out a personal loan, one that actually allows you to manageable and reasonable repayments. Taking out a personal loan is indeed a much safer option than forking out a huge sum out of your own personal savings, especially if you can foresee that he might face difficulties repaying you back.
Consolidate your Credit Card Debts
Are you stuck in a revolving debt cycle paying off huge spends on your credit cards? Let’s face it—we all get carried away indulging in our bad habits sometimes. But there is really no reason to suffer the consequences and torture yourself month after month on a 24% annual interest, when you can settle the payment with a single loan. Avoid interest rates from multiple high-interest credit cards with a personal loan on a single repayment schedule.
Life is full of surprises and it will sometimes throw you with unexpected situations. A personal loan can be beneficial when you have to deal with unfortunate circumstances (e.g. medical bills, household/car maintenance) that need to be attended to right away. Instead of owing large amounts of money from interests incurred due to late payment, taking out a personal loan to get you through this temporary period can cover these urgent needs more practically.
Maintain A Reasonable Level of Funds After Huge Purchases
Say you’ve saved a lump sum of $15,000 for your big day or a long-awaited vacation. Even though you’re capable of paying for it all at once, you might actually want to think twice before doing so. Taking out a personal loan and then gradually paying it off in terms can ensure that you’re not low or zero on funds while on vacation and you are still able to enjoy your holiday with a peace of mind!