3 important things to know about personal loans.
Sometimes you need to access extra cash to pay off high-interest rate credit cards. Maybe it makes sense for you to consolidate your debt into a single payment.
If your savings are almost non-existent and no sizable bonus is in sight, what do you do?
In a situation like this, you may want to consider a personal loan.
If you are in the market or considering taking out a personal loan, here are a few things you need to know.
What is a Personal Loan?
A personal loan is a type of unsecured loan with a fixed interest rate. The repayment is done in equal monthly installments with the designated payment schedule.
You may access the funds in as little as 1 business day or less depending on the bank and their approval process. The good news is unlike a mortgage, a personal loan can be taken out for any personal use.
Whether it’s to consolidate debt or pay for your dental services, you can use the money towards any those things.
While it is fairly easy to get a personal loan and the interest rate is usually really low, you have to use with caution.
First, if you are in the market for a personal loan, borrow only what you need and can pay back. If you only need $3,000 to pay off your high-interest credit cards, take out just the amount. Don’t borrow unnecessarily high amounts which will you put in a debt rat race all over again.
Also, plan and schedule your payments to pay off your loan early. This early repayment will save you even more money over the life of the loan.