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5 Signs You Need a Personal Loan and How to Best Use It When You Get It

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How to use a personal loan to improve your life

When things get tough sometimes, we all need a plan B.

Many people’s plan B is to get a personal loan which is a great thing but the question becomes, what's the plan for your personal loan?

Let’s first understand what a Personal loan really is

A personal loan is an unsecured loan. So you need no collateral to receive it.

You can apply for a personal loan from a traditional bank, through on-line platforms or even from credit unions. All you need is your identification and verification of address.

Because of how easy it is to get a personal loan, lots of people go for it.

But who really needs a personal loan? Here are 5 signs you need one

Who needs a personal loan?

1. Someone that needs to start a side business so that you create more income

3. If bills are almost overdue(Taking out a loan to keep bills paid on time is one way to protect credit standings)

4. You have gaps in your insurance

5. When emergencies like sickness, travel, funerals arise

How to improve your life with your loan

1. Pay off depressing debt

I know this sounds like adding debt to debt but think about it, a personal loan has a fixed repayment plan so you don’t have to worry about surprise interest rates, take it and solve the recurring debt so that you can have space to breathe and think

3. Create an emergency fund

Don’t wait till there is an emergency to start looking for money. it makes sense to get a personal loan and pay back slowly while knowing your rainy days are secured.

4. Pay off your credit card debt

Paying off your credit card is one of the best reasons to take a personal loan.

Since personal loans are unsecured, their interest rates are high but those rates are still lower than the ones for traditional loans. Paying off your credit card debt with a personal loan will help you save money. However, this will require you to stop using your credit cards if you want to keep your debts low.

5. Fund special occasions

For many, this sounds luxurious but what is life for? What do we work for if not to enjoy the moments of life? For couples that cherish the beauty of their Engagement, wedding, and honeymoon, a personal loan helps you live the dream.

When not to get a personal loan

When you have no steady income and a payment plan

The real reason a lot of people stress with paying back loans is that they don’t have a payment plan or if they have one, they don’t stick to it.

It is a common thing for people to think that loans are free money which traps them into getting loans and not paying back.

And for God’s sake if you don’t have a steady income and are not borrowing to create income, don’t borrow. You will die of a loan heart attack.

If there is no real emergency

lenders often have loan products for consumers to obtain fast cash, as soon as the next business day. This works out great to save you during emergencies but don’t take advantage of this availability and get a loan when you don’t really need it.

Unnecessary luxury

You want to throw a friend a surprise birthday party. You want to travel for a weekend to have fun, you want to shop. All these are no no’s for getting a personal loan.

The beauty of a personal loan

Truth is many of the billionaires of the World built their businesses using loans. It is a quick way of accumulating money and using the same money to grow. If you play your cards well, loans will help you to the top.

Although some lenders will want to know why you want the money, that doesn't mean you must always use it for what you said you would use it for. If what you plan to use the money for is legal and it will help you solve a pressing issue or it will bring in more money, you can do anything with your personal loan.

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