Home > Blog Posts > Loan Help & Assistance: 5 Ways a Loan Can Help You
Loan Help & Assistance: 5 Ways a Loan Can Help You
April 27, 2016●
4 minute read●
Not all debt is bad debt, but sometimes you might need a loan to help your finances. With the right advice, you can use personal loans to get ahead and improve your overall financial wellbeing.
If you’ve never considered taking out a short-term personal loan, you might be surprised to find there are several ways they can benefit your financial situation and improve your standard of living.
The first way a personal loan can benefit you and your family seems pretty obvious when you think about it. Home improvements and renovations are almost always a sound investment, and in most cases, they’ll add significantly more value to your property than what you spend on them.
If you don’t have the spare cash or the equity for the renovations, personal loans can be a good way to finance them. You may even be surprised to find the interest rates a lot more affordable than you imagined.
The right renovations—especially kitchens and bathrooms—can deliver a great return on investment, so sometimes it’s worth the little extra interest to get the ball rolling.
Personal Loan or Credit Card?
There are a bunch of reasons you might think about racking up some debt; a looming wedding, an overdue vacation, or fixing an ailing car.
You might be able to choose between using a credit card or a Personal Loan to fund the expense – but which is the better way to go? While their interest rates might not differ greatly, there are several things to consider when choosing between a Personal Loan and a Credit Card.
Personal loans are repaid over a set term, so you know how long you’ll be committed for and can plan your finances accordingly. Credit Cards have no set term, so they need a great deal of self-discipline if you’re going to settle the debt within a reasonable time. If you only pay the minimum repayment amount each month, the loan balance won’t reduce, and you’ll be in debt for an extended period.
A Personal Loan is for a set amount whereas you can keep on drawing from a credit card which (if not controlled) could get you into hot water! Everyone’s different, and only you know what loan product would suit you best.
If you’re wanting to start a new business, or buy equipment like computers for a business you already run, you could save a lot in the short term by getting a personal loan. Most business expenditure is tax-deductible, but you won’t see the benefit of it at tax time if you’ve been paying huge amounts of credit card interest for more than half the year when you didn’t need to.
There’s another obvious way a personal loan can help you: by getting you through a rough patch following an accident, illness, or another medical emergency.
Many medical expenses can be claimed under government allowance or private health cover, but in many cases, you have to cough up the amount in full first. You might even be putting off important treatment because you can’t afford it, which is only going to hurt you more in the long term.
Most people don’t have that kind of money lying around. Even if you’re a public patient and your hospital expenses are virtually free, there’s a good chance your outpatient treatments, medications, or unpaid time off work will cost you a lot. A personal loan can get you through periods like this if and when they happen.
Improved credit rating
A little-known benefit of personal loans is improving your credit score. Taking out a personal loan—or, more specifically, being approved for one—boosts your score instantly, and paying it off on a regular schedule (and not in a lump sum) will push it up further.
A short-term personal loan can mature in just a few months, so you usually won’t have to wait very long for it to take effect and improve your credit score.
This is particularly helpful for those people trying to break into the property market in tough conditions. Taking out a personal loan and paying it off diligently over the loan term could be the thing that brings your credit score up high enough for a real loan—a mortgage.
Taking out a personal loan, when planned sensibly on solid advice, can help you consolidate and reduce your debt. If you’ve got debt spread across high-interest finance sources like credit cards, taking out a personal loan can help you to regain control of your finances.
Credit card interest can get away from you, making loans a better option if you’ve got the capacity to finance the loan and pay it off in the specified loan period. Because personal loans have a comparatively short loan term, they won’t suit every situation, and some debts are better resolved with professional consolidation. Find out how to get mortgage refinancing consolidation.
You’ll definitely need the right financial expertise to help you determine whether a personal loan is the right option to reduce your debt. But it’s certainly a potential solution for those struggling with big interest repayments.
Loan Help & Assistance
Always get informed advice before making financial decisions that could affect your long-term financial wellbeing. For more information on personal loans and how they might benefit you and your family, contact Jacaranda Finance, and we’ll be happy to share our expertise and help you invest in a brighter financial future.
Written by Jacaranda Team