Depending on what you need money for, you may be best getting a personal loan. Depending on how much you need, they can be similar to fast loans, or they can be a larger amount and therefore require more information from the borrower and a little more time to have approved. Here, we've listed some of the reasons why a this option may be right for you:
Reasons for personal loans
Pay for that special event- If you have a 21st, special anniversary or wedding fast approaching, it can be a great idea to get a quick loan to cover the costs. That way you can enjoy the event, have everything covered, and simply make the repayments at a later date.
Consolidating your debt- Sometimes the interest rates on personal loans are lower than that on credit cards. Getting one to pay off your credit card debt can actually help you to save money in the long run, not to mention merge your repayments into one, easy to manage payment each week.
There are often all sorts of fees associated with different loan and credit cards. Getting one is a great way to rid yourself of these extra charges.
Purchasing a big ticket time such as a car- You may want to consider getting your hands on some quick cash to purchase a car. Loans are often fast to apply for and have approved so you can have a vehicle in no time at all. For those who live in areas where there is little or no public transport a car is vital and loan is a great way to help you get it.
Loan term- Often you are given the opportunity to select the term of the loan, so you can make sure that the repayments suit your budget. They will often calculate for you how much the weekly repayments will be on a certain amount for the term you've selected so you can enter the agreement knowing exactly how much you need to pay.
Types of loans- There are a few different types. You need to decide on which one best suits you:
Unsecured and Secured personal loans
An unsecured loan generally has the highest interest rate. The reason for this is that it does not endanger any of your personal assets. People who do not have any major assets to secure their loan will go with this option.
A secured loan will offer a much better interest rate as they will secure your loan with a major asset like your house or car. They are usually a preferred option but of course there is greater risk of losing your major assets if you are unable to make the repayments.
Variable interest rate
This basically is self explanatory. Variable interest rate personal loans mean that the interest you are paying on the loan is not fixed. This means that the interest rate will fluctuate, which could depend on the official cash rate.
Fixed interest rate
A fixed interest rate personal loan means that the rate of interest charged on your loan is fixed for a period of time set out in the contract. Once that period has ended the interest you pay on the loan will return to variable.
Like cash loans or any type of loan you can get from a lender, one of the most important things to consider before making a decision is to figure out if you can make the repayments required. If you are unsure, it's a good idea to get the advice of a financial professional before making your decision.
Personal loans can be a great option in a number of circumstances. I hope our list of reasons and an explanation of why a personal loan may be right for you has given you some useful advice about how to choose the right loan option to suit your current needs.