Loan Lister

Sometimes we make life-altering choices spontaneously and sometimes life-altering events make our choices.  No matter your reason for thinking about a personal loan, it can sometimes pay to think things through.  Before obtaining a personal loan, ask yourself these questions.

Why do I need a loan?

Will it improve my life or situation?  How will it improve your quality of life?  Is it for medical treatment or a new toy?  Is what you need (or want) that important?  Sometimes the answer is obvious, and sometimes want overwhelms reason.  Sorting through your feelings will help determine if getting a loan is a wise decision.  This is the perfect time to ask yourself how much money you really need to borrow.

What is my credit status?

Have you been late making a payment or defaulted on a loan?  You might want to obtain a credit report and make sure it is accurate.  Bad credit means a higher risk of denial or a higher interest rate.  The lending institution may either deny your loan altogether or approve a lower amount.  Higher interest rates increase you monthly payments and decrease the amount you can afford.

How much can I afford to borrow?

With interest accruing and life occurring ask yourself how much can you afford to pay per month and still budget for the future and for emergencies.

Before you think of putting a big-ticket item on a credit card or maintaining a high level of debt for an extended period, consider a personal loan.  Personal loans offer great advantages over the standard credit card.  If you have or will incur any of the following, then it is time to look into getting a loan.

1. Make a major purchase.  Whether buying new furniture or boat, obtaining a personal loan can save you hundreds or thousands in credit car interest.  A secured (collateral-based) personal loan can offer a much lower interest rate with fixed monthly payments.
2. Renovate your home.  You do not need collateral to obtain a personal loan.  There are many types of short to long term unsecured loans available.
3. Accrue medical bills.  Sometimes medical expenses outweigh insurance coverage.  Medical treatment is both costly and necessary but putting it on a credit card is only one of these.  Personal loans are available for unavoidable expenses, such as medical bills.
4. Carry credit card debt.  If you are carrying or plan on carrying credit card debt for more than 6 months or if your introductory interest rate is about to expire, look into loan options.  Credit cards often have high interest rates that compound daily.
5. Consolidate bills.  Whether your bills are from credit cards, loans, or various other expenses, personal loans are a great way to get a handle on your budget.