No matter who you are, where you are from, or what your financial situation may be, at one time or another, you will need a personal loan. People take out personal loans every day all around the world, and the reasons they decide to take out personal loans are forever differing. For some, they may need to cover medical expenses, for others it may be as simple as a business start-up fund, a new car, or even for home renovations.
Back in the day the cheapest way to take out a personal loan was through a credit union or bank as opposed to a private lender, you will able to receive it at a far better rate. Online lenders have become another great alternative for taking out personal loans. They take on a competitive, professional, and unique edge regarding their fee schedules, the things they offer, and they are giving all the usual options a literal ‘run for their money’.
So, the real question is, why should you consider a personal loan when there are so many different alternatives? Consider some of these great benefits of a personal loan, and compare personal loans at Financer.com.
1. Simple/predictable payment schedule
When you are approved for your personal loan, you will be able to find out exactly what you will be paying each month with your repayments, and what exact dates they fall on. You will be able to find out exactly how much you are paying, how many monthly repayments must be made, and your total interest cost over the life of the loan. Personal loans have fixed rates, repayment terms, and monthly repayments which are kept strict.
However, credit cards and home equity lines of credit are not the same as they just aren’t as predictable. Your interest rate is subject to change with benchmark rates which can be highly irritating as well as confusing. All you will know is your monthly repayment date which depends on a plethora of different things.
2. Potential higher borrowings as opposed to a credit card
The borrowing limits on personal loans tend to be far more generous than credit line limits. Personal lenders tend to cap their loan principles at around $25 000 to $30 000, however, few are far more generous and will allow up to $100 000 in only a single loan. As well as personal loan providers, credit card issuers also use several to determine your spending limits.
Most of them come from consumer credit reports:
- Credit Score
- Bankruptcies or delinquencies that were recent
- History of income and employment
- Payments that are active on other credit accounts
- Frequency/timing of credit inquiries
- Debt-to-income ratio
3. Better and easier to use than multiple credit card accounts
Having and managing a singular lump sum is far easier than managing multiple credit cards account for various reasons. A single and fixed-rate personal loan will prove far easier to manage in the long run because you won’t have to deal with different spending limits, interest rates, policies, and payment due dates.
For example, if you are looking to borrow $30 000, it would make far more sense to apply for a single personal loan in that amount rather than four credit cards each with a spending limit of $7500 per card. Why not take some of the hard work and apply for a single personal loan and not have to worry about the excess struggle of multiple credit cards?
Personal loans have several handy benefits which can far outweigh the benefits of credit card/other alternatives. They have several advantages that you just won’t see or find in other alternatives.