Personal Loans: The Swiss Army Knife Of Personal Finance

That Makes Cents

Young woman sitting on floor, smiling, while holding cup of coffee, scrolling through her mobile phone, moving boxes all around her

Sometimes life throws expensive surprises. To cover them, you’ll need to borrow. If you’re borrowing to finance one of these costly events, consider a personal loan.

1.) Weddings.

When it’s time to get married, the wedding is on – there’s no waiting for funds!

The average wedding costs over $30,000, too much for one credit card, and the interest would make it incredibly more expensive. A personal loan beats credit cards and financing; you’ll have both a better repayment plan and interest rate.

You may even benefit further if you skip the deposit and offer to pay more of the total cost up front in exchange for a reduced bill.

2.) Adoption.

Adopting a child is the consummate kindness but can be very expensive. Costs can exceed $50,000.

Obtaining financing for this process can be difficult. Unlike traditional big expenses, there’s no collateral; no one can repossess your child if you fall behind on your loans.

A personal loan can make this process a reality. Because the terms are short, you can also pay off your loan in a relatively short time.

3.) Short-term house sales.

Shows like “Divine Design” have inspired people to purchase properties, fix them up and sell them for a profit. This dream hobby or full-time job has one problem: capital.

When you buy a house to sell again, you’re likely borrowing as much as you can to pay for it. That doesn’t leave much money for fixing-up. Some remodeling can be done cheaply but much of it will require capital. Since you don’t have much equity in the property, borrowing against it isn’t possible.

A personal loan can be your answer. With affordable rates and flexible repayment terms, it can finance those improvements. And when you sell the house, you can repay the personal loan early without a penalty!

4.) Launching a small business.

All new small-business owners face start-up costs. While these costs may be small, it will be a while before your business turns enough profit to recoup these expenses.

A personal loan can broaden your timeline to profitability. Rather than needing to turn a profit immediately, you can take time to develop the business. Since your debt servicing is a fixed cost throughout the course of the loan, it’s also easy to plan for repayment.

5.) Extra education expenses.

Your student loans may not cover all your education costs. Additionally, if you’re going back to school later in life, many traditional funding opportunities may be closed for you.

In these instances, you can take out a personal loan to cover the extra costs of your education. Instead of paying for those costs out of pocket or with a credit card, you can pay for them up-front with a loan you can budget for going forward, as it’s a fixed expense.

 

SOURCES:

https://www.theknot.com/content/what-does-the-average-wedding-cost

http://fitsmallbusiness.com/fix-and-flip-loans/

4 Comments on “Personal Loans: The Swiss Army Knife Of Personal Finance”

    1. Hello, a member of our member service team will be happy to assist you. Give us a call at 888-508-2228 to chat further.

  1. That’s good to know that if you take out a personal loan to pay for an adoption that there isn’t collateral since they can’t take your kid but that the terms are short which makes it easy to pay it off in a relatively short time frame. My husband and I really want to adopt but we realized we can’t really afford the adoption process at the moment. We’ll have to look into taking out a personal loan so we can continue with the adoption and we’ll know that we’ll be able to pay it off as well without worrying about it.

  2. I love what you said about adoption and how it is the consummate kindness, but it can be very expensive. Personal loans offer a great way for people to get money fast with the intention to pay it back in a timely manner. If I were to take out a personal loan, I would make an effort to find the best service in my area to get a fair loan.

Leave a Reply

Your email address will not be published. Required fields are marked *