The Kitchen Table

4 Reasons Why a Personal Loan Can Be a Great Idea

  • May 10, 2016

If you have had an unexpected medical or auto expense, or the bill collectors keep knocking on your door, you might feel like you have no options. It’s easy to feel overwhelmed when you are staring down a mountain of debt with no solution in sight. If this is how you feel, then keep reading because I have some great ideas for you!

  • 1.You want to consolidate debt

If you have balances on multiple credit cards, it can be a challenge to get them paid off. Making only the minimum payment can have some pretty negative consequences on your wallet. Not to mention that your minimum payment will balloon as the balance on your card increases, whereas a personal loan has a set minimum monthly payment with a fixed shorter term. You’ll always know how much to set aside in your monthly budget for a personal loan payment.

  • 2.You need money and you need it now

An unforeseen expense of any kind can put a monkey wrench into your financial plan. But before you reach for the plastic or call a payday lender, consider a personal loan. In most cases you can get your money the same day and you’ll avoid the pitfalls of carrying a credit card balance and the expense of a payday loan.

  • 3.You want to improve your credit score

10% of your credit score is made up of the type and mix of credit you have. Since a personal loan is an “Installment debt”, it’s classified differently than a credit card or “Revolving debt”. By having a different mix of credit and by making your monthly payments on time, you could really increase your overall credit score with a personal loan.

  • 4.You want to break your bad credit habits

If you find yourself getting stuck in the never ending payday loan cycle or you are opening up new credit cards to transfer your balances. Then a personal loan could help you break these bad debt habits. It requires discipline, commitment, and drastically reducing your spending habits, but a personal loan could be your ticket to financial freedom.

Remember, a personal loan isn’t a cure all. It might not be the right solution for every situation. But if it makes sense and you are serious about taking control of your debt, a personal loan could help transform your credit.

*Employees of LPI Loans and our affiliates are not attorneys and LPI Loans DOES NOT provide any legal advice and users of this web site should consult with their own attorney for legal advice.

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