When Does It Make Sense to Get a Personal Loan?

6/1/2018

A personal loan is a type of unsecure debt, meaning you’ll take one out without having to offer collateral. Loans usually come in at a few thousand dollars, and it makes sense to seek a personal loan to:

  • Consolidate Debt
  • Make a Large Purchase
  • Make Home Improvements
  • Cover Emergency Expenses

When Should You Take Out a Personal Loan?

There are some times you shouldn’t take out a personal loan — it doesn’t make sense to take one out simply so you can finance a lifestyle you can’t really afford, for instance. However, there are plenty of legitimate reasons for taking out this type of loan, including:

  • Consolidating Debt: If you have lots of debt on various cards and accounts, you can lower the overall interest rate and simplify payments by taking a personal loan to pay off those debts. Instead of making lots of payments at the end of each month, you can make just one.
  • Making a Large Purchase: While borrowing money for something you don’t really need is a bad idea, personal loans are great when you need something now and know you’ll be able to make the repayments. It’s easier to budget for several smaller payments rather than one larger one.
  • Making Home Improvements: Home improvements can add value, lower your monthly utility bills, and prevent future expenses, so taking out a personal loan to cover them right away might be a good idea.
  • Covering Emergency Expenses: Whether it’s a broken down car or a broken leg, you’ll sometimes be faced with large unexpected bills. Instead of dipping into your savings or running up the balance on your credit card, you can seek a personal loan.

Talk to Us About Debt Consolidation and Credit Card Consolidation

Whether you need to finance a small business in Bloomington, carry out home improvements in Fairview Heights, or cover your auto costs when your car breaks down in Edwardsville, a personal loan can help. Visit your local central Illinois branch of Town and Country Bank or Peoples Prosperity Bank to learn more, or feel free to use our online calculators for an idea of loan sizes and terms.

More Posts