There are different types of bank loans. There are personal loans, business or commercial loans and mortgages. Bank loans are the most common and popular forms of loans for both doing business and personal reasons.
Bank loans provide medium- and long-term financing options. The bank then agrees with the customer on the period of repayment, the timing and amount. The interest on the loan is predetermined.
A personal loan is one which is taken for personal reasons other than business financing. They are generally different from business loans in that you only need to demonstrate the ability to repay. When dealing with business loans, you need to show the ability to repay, security, turnover figures from the business and many more documents.
There are numerous reasons one might have for taking a personal loan. Here are some you should consider.
To Pay off Credit Card Debt
This is one of the best and most common uses for a personal loan. A bank will not need a customer to provide security when taking a personal loan. For this reason, they often come with higher interest rates compared to secured loans. These interest rates are however lower than those charged by most credit card companies.
In order to pay less interest and save money on your monthly payments, it is advisable to take a personal loan to pay off the debt. Another option would be to get a specific debt consolidation loan or a personal loan with lower interest rates. This will, however, require that you stop using your credit card.
To Start a Business
Sometimes your job is not enough to satisfy your needs. Sometimes you want to chase the dream of being your own boss or capitalize on a new idea you cannot stop thinking about. A lot of startups have a problem finding financing from banks as they consider them too risky.
Side hustles as they are popularly known can be your gateway to the life you really desire. Personal loans are a lot of times used to finance side hustle startups. Instead of saving your monthly salary, you can take a loan and pay it back from your salary then from your business returns once it is up and running.
To Finance Your Wedding Ceremony
Many of us will have our wedding day planned out mentally months or even years before the big day. On average, a wedding in America cost $35,329 back in the year 2016. Studies have shown that as we move forward, the number of guests have gone down while the costs have gone up.
It is not an easy fete to raise this amount of money just from your savings or salary. The afterparty and honeymoon also require funding after all. An easier option would be to take a personal loan to fund the once in a lifetime event.
The amount you take will depend on your financial situation at the time, it will, however, offer a much-needed reprieve from the hassle of planning a wedding. Making your big day perfect should be your priority, not financing it. As long as you have a solid payment plan, you should be good to go.
To Pay a Medical Bill
Sometimes we or our loved ones may end up in hospital unexpectedly. Sickness and accidents come at the times we least expect. As the date of discharge draws closer, another cause of stress starts to present itself. The medical bill.
Healthcare is a costly affair in most parts of the world. Quality healthcare is even more expensive. Sometimes, using your savings would not be the wisest of options.
Personal loans are not limited to medical emergencies. Cosmetic surgery, medical insurance for international travel, fertility treatment and many others are all under this category.
To Go on Your Dream Vacation
Most of us have our dream destinations in mind. Especially in this internet age, we get to see pictures and videos of them almost all the time. Apart from time, another limiting factor a lot of people have is money.
Traveling is not cheap for most. From purchasing air tickets, paying for accommodation, shopping and touring the destination, it takes money. Just as a personal loan can help you on your honeymoon, it can also help for any other vacation.
To Purchase a Car
Purchasing a car on cash terms is sometimes not possible for most of us. Saving up to buy your favorite car will also take a lot of time and effort. Taking a loan will make things easier and much faster for you.
Financing Funeral Expenses
Death is one of the most painful aspects of life that we all have to go through at some point. It comes with anguish, confusion, grief and much more. One of the hardest parts is it costs money.
Buying the casket, burial plot, funeral home expenses and the funeral service all need financing. Many times, death will visit us unexpectedly and it is up to us to finance and coordinate the sendoff. A personal loan will be of great help, should you need it.
Financing Your Home Remodeling Project
There are many reasons people remodel their homes every now and then. It could be to make new room for an expanding family, to install a new appliance or just as a hobby.
Remodeling is not a cheap affair as there is a range of equipment and material needed for this project. borrowing money from the bank will prove a great decision, saving you both time and stress.
To Pay for Moving Expenses
Sometimes relocating to a place far from your current residence is costly. Transporting your belongings over a large distance and buying new furniture takes more money out of your pocket. You can borrow money from a bank or take a loan from CaptainCash to make things easier for you.
To Improve Your Credit Score
Credit bureaus use factors monitor factors such as installment loans to determine your score. If your payments have been timely and without default, your credit score will improve. Take a personal loan and keep your ratings high.
To Make an Unexpected Purchase
If your refrigerator or television suddenly broke down, it would not be advisable to wait for your salary or take a chunk off your savings in order to buy a replacement. A personal loan would be of great help in such a situation.
Personal Loans Are Both Timely and Convenient
It is quite simple to apply for a personal loan. It is also a convenient way to go about your personal business. Borrowing is a highly recommendable way to get things done. For more tips and articles, be sure to check out our page.