It can be time-consuming to draft a budget and even more difficult to keep to it when emergency expenses arise. Do you seek help from friends or take out a personal loan when these emergencies arise? If you’ve never considered getting a personal loan, you should be doing so now. In this article, we will explain what is a benefit of obtaining a personal loan.
Personal Loan Benefits
Personal loans are great loan options for consolidating high-interest debts, fixing costly car faults, and financing projects with large cash implications. They have a long list of benefits and are worth considering if you can afford one. Here are some other benefits of personal loans worth mentioning.
Lower interest rates
Long-term loans like personal and installment loans typically have lower interest rates compared to short-term ones like same-day loans. They range between 4%-36% in general.
Longer loan terms
The loan term on personal loans is much longer than payday loans. Depending on the lender and their assessment of the borrower’s profile, they may be up to 48 months, sometimes up to 72 months.
Help borrowers improve their credit score
Some lenders report monthly payments to the three major credit bureaus. Since payment history constitutes 35% of your credit score, paying on time regularly can improve your credit ratings.
They are incredibly versatile
Personal loans can be used for just about anything. There are no limits to its use. Therefore, they may be used to cover unexpected expenses, consolidate debts, or finance large purchases.
Can be unsecured
Personal loans can be taken out without collateral. This means you don’t need to put up your home, car title, or any other valuable asset as a guarantee to repay the borrowed cash.
Provide quick access to cash
Personal loans are easily accessible. The entire application process is done online and can be completed in a few minutes. The approved loan amount can be also disbursed within a day or two.
High borrowing limits
Although borrowing limits vary from lender to lender, those on personal loans are usually high. Some lenders give up to $30k+, and a few others give even more, up to $100k+.