You’d be surprised how often personal loans get overlooked. While borrowing money is never ideal, small loans can prove useful for a variety of reasons. The following are five smart ways to use personal loans:
- A Wedding
You’re getting married, which is wonderful until you realize how much it’s going to cost. People can spend $20,000 or $30,000 on these events. Many times, folks just rely on credit cards to deal with some, if not all, of the expenses that come along with a wedding. You deserve a wonderful wedding, but you don’t need to go into credit card debt to have one. Most of the time, credit cards come with high interest rates. You don’t want to start your lives as a couple with high interest debt. Personal loans usually come with more favorable terms, so consider that instead.
- A Renovation
Those who have a home might want to consider a renovation. It may not seem like it now, but taking this step means you’ll be using personal loans to your advantage. Renovations take a long time and do take a lot out of you. Having all these people in your house can make you feel like you don’t have privacy. You’ll be dealing with all the noise, but it’s worth it in the end. Depending on the renovations you get, you could end up with a house worth more than what you paid. When you decide to sell, you might get more than your asking price because you took the time to modernize it.
- Auto Loan Alternative
You’re thinking of getting a new car. Before you sign anything, don’t make the mistake of thinking your only loan option is the auto loan. No, you can definitely take out a personal loan to help you pay this car off. Bring your agreement along, and let the salesperson see you have your loan. You can ask if they’re willing to match that loan or give you something better. Chances are they won’t, but give them a chance. What you have in your hand is a bargaining chip, so make sure you use it correctly.
- Take a Vacation
Vacations are vital. They give your brain a bit of a break and allow you to explore more of this world as long as that part of the world is open. The problem is most people go credit card crazy when planning a vacation and during the vacation. Again, you don’t want to rely on credit cards with high interest rates. Take out a personal loan, and make sure you budget your vacation well so that you don’t have to use your credit card at all during the trip. Other than a few essentials like travel bags and toiletries, avoid using the loan to buy items. Ideally, you want to come back with some of what you borrowed so that you can start paying it back.
- Down Payment
Time is tricky. It may seem slow at times, but it’s moving pretty quickly. If you’re hoping to buy a house but continue waiting because you’re saving for the down payment, then you need to rethink this strategy. You can take care of this down payment and some of the closing costs by only getting a personal loan so you can enter escrow. Yes, this does mean you’ll end up with outstanding debts. You’ll have your loan and your mortgage, but at least you would be investing in your own home. The house can be passed down to your kids, and you’ll never have to deal with rent again. If you add up all the advantages, you’ll see why using a personal loan was the right decision.
These are some ways you can use personal loans to further your interests. Make sure to budget your finances with this new reality because you want to pay this loan back as soon as possible.