Too often, the idea of a loan is met with negative associations. This is because people view the need for a loan as a direct result of poor financial management or overspending. This is certainly not the case. A loan can in fact be a person’s investment in their future.
When should you not take out a personal loan?
Why should you put your hopes and dreams aside when a personal loan could help you realise your aspirations? However, there is a big distinction between taking out a loan for the right reasons and taking out a loan that could harm your financial wellness. If you’re taking out a loan to pay off existing debts, you could be doing yourself far more harm than good. In this situation, you should be talking to your credit providers and working with them on a plan to reduce your debts without having to put yourself deeper into debt. Responsible lenders should be able to work with your specific challenges and provide solutions that reduce your debt burden.
Why should you take out a personal loan?
On the other hand, taking out a loan to further your or your children’s education, make some home improvements or to support growing your small business – these are good reasons to look at taking out a personal loan, as these things all contribute to improving your financial wellness in the long term.
Why a personal loan?
A personal loan is exactly what it says it is. It’s for “personal” use to improve your personal financial wellness. It’s also a relatively simple type of loan to apply for. Two key factors that come into play here is your credit score and your income after you have paid for all your expenses (disposable income). Just imagine the opportunities that a personal loan can create for you. It may just be a loan today, but it could mean that your child gets the best education possible; you finally manage to make those much-needed home renovations or upgrade the car for the growing family.
The important thing to remember is that a personal loan should only be taken to help grow your future and not as a means of paying off debt, as this could lead to a problematic future. All you need to do is ask yourself, “Is this personal loan going to create opportunities for me and am I going to be better off down the line?”
Still not sure about what a personal loan can do for you?
Here’s our top 5 reasons why a personal loan could be good for your future:
Invest in yourself
Whether you’re planning a business endeavour, you want to give your kids the best education opportunity or maybe you’re even considering advancing your own education – a personal loan can help you quickly get started in the right direction.
Paying for education
This is undoubtedly a way in which a loan can help to pave your future. Your education is a vital piece of the puzzle and you may need help to pay for the associated fees. Imagine: going to school, getting into the university of your choice, getting hired straight out of varsity, moving to your dream job, climbing the corporate ladder and becoming CEO – none of which would have been possible without that initial loan for your education
Taking out a personal loan to finance your home improvements is a good option. Whether you want to fix up your kitchen, add a bedroom for your growing family, install solar panels or even do some general maintenance, a personal loan can help make your dream home a reality.
Often, accidents or emergencies don’t give us any warning, so you may not have the necessary funds on-hand to be able to deal with this. That’s where a personal loan can swoop in and save the day. Personal loans can be granted relatively quickly; therefore, they could be used to efficiently finance an untimely emergency.
Adding to the pot
If you’re a business owner, you probably already have some type of funding. However, you may reach a point where you need additional funding in order to grow your business. In this regard, taking out a personal loan is an effective way to supplement your current funding.