Should You Consider Getting a Personal Loan?
If you’re considering making a large purchase, a personal loan could help you finance the expense. These kinds of loans are installment loans, which means that you will receive a lump sum and then repay it through monthly payments, until you have completely paid it off. Unlike auto loans or home mortgages, personal loans aren’t for anything in particular, and you can generally use them for anything. However, as with any kind of loan or credit you get, it is important to consider the terms and your ability to pay it back before signing for a personal loan. Is a personal loan right for you? These are some of the signs that you should consider getting one.
You have high-interest debt that you want to consolidate.
If you have high balances on credit cards, a personal loan could be a good solution to get your bills under control. Most personal loans have lower interest rates than credit cards, so by getting a loan to pay off all of your credit card balances, you can save a significant amount of money on interest expenses. If you’re paying on multiple cards, then consolidating your debt in this way will also streamline the process of paying off your cards, since you’ll only have to make a single payment going forward. However, resist the urge to drive your balances back up once you zero out your credit cards.
You’re planning a home improvement project.
Home improvement projects can be great investments, since they can add value to your home. However, financing them sometimes means running up big credit card bills with high interest rates or borrowing against your home. A personal loan allows you to avoid these scenarios and pay for your project with an unsecured loan with lower rates than your credit cards.
You have considered how to repay it.
In order to stay in control of your finances, avoid borrowing any money you haven’t made a plan to repay. Be sure you understand the terms of the loan up front, so that you can plan for repayment accordingly.
If you’re interested in applying for a personal loan, contact GCS Credit Union. We offer competitive rates and can help you find the best loan for your needs. Call our credit union in O’Fallon today at (618) 797-7993.