Personal loans come in all shapes, sizes, and interest rates. Unlike auto loans or home loans, personal loans are unsecured. This means that you aren’t required to put up any type of collateral in order to get your funds. Instead, we’ll look at your credit history and the purpose for the funds to determine if we can approve your loan application.
An important question that people often find themselves asking is “what is a good reason to get a personal loan?” Great question! If used correctly personal loans can be a powerful tool to improve your financial situation. Here are four good reasons to get a personal loan.
Reason Number 1: Debt Consolidation
Debt consolidation is the process of combining multiple loans and credit cards into one monthly payment to lower your interest rate and how much you pay. Since the average rate on a credit card is about 16%, if you have multiple cards with a balance on them, a personal loan could help you get back on track with your debt.
Reason #2: You Need Emergency Cash
If you need money right away to cover emergency expenses (surprise medical bills, past due utility payments) a personal loan can be a solid option. Just be certain that you are borrowing the funds for a genuine emergency.
Emergencies happen, and they often happen when we least expect them. A personal loan can help you get out of a pinch and get quick access to the funds you need.
Reason #3: To Avoid a Payday Loan
Payday loans are short-term, carry a super high-interest rate (normally over 300% APR), and charge expensive fees. A personal loan is a great alternative to a payday loan. If you have a lower credit score, you may have heard a payday loan is your only option when you need access to cash, that isn’t true! Our loan process looks at your entire story not just your credit score and we’ll help you find the best loan to fit your needs.
Reason #4: To Fund a Small Home Renovation Project
In most cases, a Home Equity Loan or Home Equity Line of Credit is your best choice for your remodel project. They have really low-interest rates because they’re backed by the equity in your home. Their only downside is they take a fair amount of time to complete, so you may be waiting for the money you need.
If your home doesn’t have enough equity, your remodel is under a time crunch, or you are tackling a small project a personal loan can be a solid option. They are usually easy and fast to access.
Connect with us to discuss your options and apply now for your personal loan at Canopy Credit Union!