If you’re at a crossroads in life, it can be useful to sit down and take the time to tally up the advantages and disadvantages of possible courses of action. Many, many people will find themselves considering whether or not to take a personal loan, but it can be difficult to find a solid breakdown of the various pros and cons attached to taking one out.

Luckily, we’ve done the hard work for you. Here are a few things to look out for and think on while you’re doing your research.

A cheaper alternative to lines of credit

Where personal loans excel is in their cost-efficacy against credit cards and other lines of credit. Cash withdrawal from your credit card is infamously expensive, and should be avoided at all costs. If you have a pressing need for immediate funds – for an emergency or to pounce on an opportunity, for example – a personal loan is much cheaper and offers much more preferable interest rates.

Lump sum out, lump sum in

You should be aware that with personal loans, the money is provided all at once, and is often expected to be paid back in the same way. If you take a loan for $2,000, you may have to have $2,000 all at once in order to pay back the loan and clear the debt. This can be a problem for people in certain financial situations who may be paid irregularly or on commission.

Some lenders do offer payment plans that allow you to pay back the loan a bit at a time. Discuss this with your loan consultant to find out if this is available.

Fast and convenient

The application process for a personal loan is often lightning quick. No extensive paperwork or documentation, no lengthy screening process, often funds can be acquired within 24 to 48 hours, making them a great option where you need a specific sum of money within a short window of time.

How’s your credit rating?

If you’re considering taking out a personal loan, it’s important to be aware of your credit score. A credit score is a numerical representation that gives banks an idea of your ability to service (pay back) a debt – the higher it is, the more the bank is going to be willing to trust you. Things such as being late on paying back bills, not making your minimum credit card repayments, keeping your debt levels at a consistently high level and others can all negatively impact your score, so be careful with your finances if you’re considering taking out a loan.

This said, some lenders do offer alternatives for individuals with bad credit scores, but the specifics of this system will depend on the lender.

Discuss your needs with your loan consultant to find out more.