PERSONAL FINANCE BLOG

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Taking out a Personal Loan
20 Jun 2018

10 Common Reasons for Taking out a Personal Loan

It’s no secret that life can be expensive. Just when you think you’ve got everything under control, an unexpected emergency pops up, and suddenly you find yourself needing to get your hands on some fast cash.

But sometimes you’ll find yourself without cash to spare, and need to consider taking out a loan. Life can be very surprising, presenting a thousand different unexpected circumstances, and those moments can turn stressful when the needed cash isn’t available. Applying for a loan can be the perfect solution.

Let’s take a look at some examples of when personal loans can save the day.

1. Buying a Car

Many people take out personal loans to buy a car, often because the don’t have the money available to pay cash, or because their credit score is too low to finance through traditional auto loans.

2. Medical Expenses

Anyone who has ever visited the doctor for any reason, especially if you’ve had a surgical procedure performed, you understand how quickly huge medical expenses can accumulate. Examples of common medical bills include fertility treatments, orthodontics, and cosmetic procedures. Many people can’t afford to cover these expenses out of pocket, and thus have to consider other financing options.

3. Debt Consolidation

One of the best uses for taking out a personal loan is to consolidate debt, such as paying off credit card balances. Personal loans often offer lower rates, which will help to lower the amount of interest you have to pay in the long run.

4. Vehicle Repairs

The truth is you never know when you might have car trouble. Perhaps you need new tires, or your radiator needs replacing. Sometime the repairs are extensive enough to run into the thousands of dollars, and if your car isn’t under warranty, the money will have to come out of pocket.

This is an occasion where you most likely can’t delay pulling the trigger on whatever needs to be done. A personal loan makes it possible to get your car back on the road as quickly as possible, even if you happen to find yourself momentarily strapped for cash. You can take care of the immediate expense, then pay it off over the next few months.

5. Home Improvement Projects

It can often seem like something is always breaking or needs to be replaced around the house. Your hot water heater goes out, or the roof is leaking and needs to be patched, or perhaps the air-conditioner dies on you in the middle of the dog days of summer.

A lot of these home improvement expenses can’t be put off for long, and yet you might not have the disposable cash on hand to make a repair from storm damage or replace the refrigerator.

Taking out a personal loan is a helpful solution in these types of cases, allowing you to go ahead and make the kind of home improvements necessary to keep everything around the home running smoothly without having to be stressed about tapping into limited funds in your bank account.

6. Vacations

Even with all the resources available online for finding great travel deals, it can still be very expensive to take a luxury vacation. If you are planning a once in a lifetime trip, perhaps for your honeymoon, or to celebrate an anniversary or retirement, these would be occasions that could certainly justify taking out a personal loan.

7. Remodling Your Home

Wanting to renovate your house? Taking out a personal loan is a great option for covering this kind of major expense.

Perhaps you’re considering adding solar panels, a new roof, putting in a swimming pool, or adding some beautiful landscaping. Thousands of home owners spend money on home improvements each year, and a significant number of those pay for the project with a loan.

8. Pay For a Wedding

It shouldn’t come as a shock to anyone when we tell you that weddings are typically very expensive. If you haven’t been involved in planning one before, you will likely experience sticker shock. Between the dress, catering, the cake, renting the church or hotel for the ceremony and reception, the price can easily reach into the tens of thousands, even for a modest wedding.

Whether the bride’s parents intend to take care of the bill, or the bride and groom themselves, this is a hefty price tag to simply write a check for. This is why many people consider taking out a personal loan in order to cover expenses for their nuptials.

9. Money for Moving Expenses

Moving a long distance can be a huge expense. These days most companies aren’t willing to pay for you to relocate. Because not everyone has a few thousand dollars on hand to cover the costs, taking out a personal loan might be very justified.

10. Paying Funeral Expenses

When someone dies, the deceased person’s estate can’t always afford to cover funeral expenses. This can put a burden on their surviving family members. Funerals can be very expensive, depending on the price of the casket, type of service desired, and location of the burial plot. Thus a member of the family will often take out a personal loan in order to cover the deceased person’s final costs.

Taking Out a Loan: Get Money When You Need It

There are times in life when you just need a little breathing room. You might experience two emergencies at the same time and not know how you can possibly handle it all. Perhaps the washing machine goes out in the same week your kid needs braces. The bills can pile up in a heartbeat.

In these moments, the simplest solution is often taking out a loan. This relieves your stress and gives you the freedom to pay it back over time rather than right away.

Click here to learn how a loan can be customized to meet your specific needs.