Should I get a personal loan? If you’re asking yourself this question, you should stop and think a minute. Here’s when you should and shouldn’t get a loan.
As we get older, it’s nearly impossible to acquire the necessities of life without getting some type of loan. There’s hardly a person out there who doesn’t at least have a car loan or home loan.
However, what about personal loans? Are they worth it?
If you’re wondering “should I get a personal loan?” take a moment to read through this article.
Should I Get a Personal Loan?
There are those out there who look down on borrowing money for any reason. However, most of us live paycheck to paycheck.
While there are certain things you shouldn’t be financing on a loan, some personal loans are necessary. Keep reading to learn when you should and shouldn’t take out a personal loan.
Yes: To Consolidate Debt
The reason many of us are cash-poor is because of the number of bills we have going out each month. More specifically, we’re talking about debts here.
Consolidating as much of your debt as possible into one payment with one interest rate will help cut your monthly costs and give you some extra breathing room. Just be wise with the money you save each month.
Yes: To Pay for Something You Need
Another viable reason to get a personal loan is if it’s necessary to pay for something you need. For example, this could be to pay for a medical procedure, get repairs done on your car, or fix/replace something broken in your home (hot water heater, air conditioning, etc.).
When you need emergency funds, you can even get same-day loans, which can be incredibly helpful in a pinch. Companies like Bonsai Finance, for example, can get you money quickly while ensuring they find a lender who will give you the best rates possible.
Yes: If It Makes Financial Sense
If you’re asking “Should I get a personal loan?” take a look at your finances and credit score first. If you have a decent credit score, you’ll be able to nab a loan with attractive rates. If not, the interest rate and payments may be too high.
Additionally, determine whether or not you can afford the monthly payments, especially if it’s not being used to consolidate debt.
No: To Make Ends Meet
Never take out a personal loan if you’re having trouble making ends meet. It’s a quick fix but a long-term inconvenience. You’re simply making it harder for yourself in the future by adding one more monthly payment.
Instead, pick up more hours at work, ditch services you don’t need (cable, gym membership, subscriptions, etc.), and put yourself on a budget.
No: To Pay for College
While paying for college is a viable reason to get a loan, it’s not a good reason to get a personal loan. College tuition is a lofty expense, but government loans exist to help people get low-interest school loans. A personal loan for something like college would likely cost you way too much in interest.
No: Unnecessary Impulse Buys
A personal loan with incredible terms is still an added debt. Instead, set cash aside every week until you have enough to buy whatever it is you want.
Any More Questions
“Should I get a personal loan?”
Ultimately, it’s up to you what’s best for you and your family. We will just encourage you to think about the long-term effects of taking on additional debt to pay off.
Did you find this information helpful? Then check back often for more financial and life advice!