Whether you are trying to consolidate your debt, buy a new car, remodel your home, or go back to school, a personal loan can help you reach your personal and professional goals. You may be asking yourself, “Should I get a personal loan?” We have got you covered!
Determining if a personal loan is right for you involves considering why you need the fund and investigating your options. We’ve created a quick guide to help you make this important decision.
What Is a Personal Loan?
A personal loan is a loan that originates from a credit union or bank to allow the borrower to use the funds for whatever they would like. Unlike student loans, mortgages, and automotive loans, there are no stipulations as to how you use the funds.
Personal loans often have competitive interest rates, don’t require collateral, and have other beneficial terms that make them an excellent option when you need funds to accomplish a goal.
When Should I Consider a Personal Loan?
Under the right circumstances, a personal loan can be life-changing. Below are some of the most common reasons borrowers take out a personal loan, and how to know when it is a good idea for you.
Homeowners often need assistance with financing major home improvement projects, upgrades, or repairs such as renovating a bathroom, updating flooring, or replacing a roof. A personal loan is a great way to pay for home renovations responsibly.
While there are other ways to pay for repairs, many people are understandably hesitant to use a home equity loan or high-interest credit card to finance their projects. A personal loan can help you get that project complete and paid off relatively quickly.
Debt consolidation is a popular reason for taking out a personal loan. This process involves using the funds from a loan to pay down the balance on your credit cards and other forms of debt.
But how do you know if consolidating your debt is right for you?
If the APR that you would receive from a personal loan is lower than the APR attached to the majority of your existing debt, then it's a good idea. Likewise, if you have trouble keeping up with multiple forms of debt with different payments, balances, and due dates, debt consolidation with one low minimum payment each month can be an effective solution.
Whether you need assistance with your college tuition, or tuition for your child, investing in getting an education is always a wise investment for the future.
Paying for school is one of the most common reasons someone might take out a personal loan. The terms of a personal loan can be more beneficial than using other types of debt to pay for school such as credit cards or student loans.
Whether you want to finance a gap year before college, take your kids to Disney, go backpacking across Europe, or pay for that dream honeymoon, travel is another very common reason why people take out personal loans.
Many times, a vacation can be a “once in a lifetime” opportunity. And if you are someone who makes life experiences a priority, financing your travel with a personal loan (instead of a riskier option like a credit card) can help you make your travel dreams true without risking other goals.
When you or your child is getting married, it is often one of the happiest occasions of your life. Many people get caught up in the excitement of wedding planning and want to spare no expense to make that perfect wedding day happen. A personal loan allows you to make that dream a reality.
Unfortunately in life, sometimes the unexpected occurs. Your car may break down, you may get stuck with a large hospital bill, or you may find yourself having to pay for expenses after the loss of a loved one. In these circumstances, a personal loan can be a true lifesaver and help you get your life and finances back on track.
Should I Get a Personal Loan?
While only you know your entire financial picture, personal priorities, and vision for the future, there are a few ways to examine whether or not a personal loan would be a good idea for you.
Can you truly afford the payments? Will you be able to pay off your loan in a reasonable amount of time? Will taking out this loan set you back, or propel you forward? Only you know the answers to these questions, but if you are ready to get started, Greater Texas Credit Union is here to help!
At Greater Texas Credit Union, we offer a variety of personal loans with beneficial terms to help you achieve your financial goals. In addition to having competitive interest rates, our personal loan products have no origination fees, no prepayment fees, and no collateral is required. Learn more today!