When it comes to the cost of borrowing, a personal loan will usually exceed the convenience of utilizing a credit card. Personal loans are granted by banks or credit unions, and many of them require an excellent credit history. They have varying duration lengths and charges of interest, but most of them charge a flat rate.

Various reasons can convince you to take out a personal loan, including funding weddings or once-in-a-lifetime vacations. However. they are frequently most useful for less joyful situations, such as unexpected house repairs or medical expenditures.

A personal loan is money borrowed without putting up collateral from a bank, credit union, or peer-to-peer lender. This flexibility, as well as the fact that the approval procedure is usually very short, adds to its appeal. 

If you have good credit and the lender is satisfied with the information you provide about your income, the loan can usually be placed in your account within a week, if not sooner.

Now that you know personal loans have a practically limitless number of applications, below are some good reasons to take out a personal loan.

Reducing High-Interest Credit Card Debt

Carrying large sums on numerous credit cards is certainly costing you a lot of money in interest payments, and it’s also hurting your credit score. As a solution, you can use a personal loan to pay off your credit cards. 

This debt consolidation can help you consolidate many debts into a single payment, lower your interest rates, and improve your credit score.

Paying for Emergencies

If you need a new roof right away or are looking for a replacement car, you may be able to pay for it with a credit card. However, large-ticket repairs might result in significant credit card balances. It can harm your credit score and result in hefty interest costs. 

A medical emergency can be the same way. An injury or illness that forces you to pay your entire yearly deductible in one payment can put a strain on your credit cards. Before you know it, uninsured medical expenditures can quickly pile up. 

Taking out a personal loan to help with these bills can alleviate some of your financial tension.

Handling Various Logistical Costs

A personal loan can help with deposits and payments for caterers, florists, venue rents, and other expenses when planning a costly one-time event like a wedding, golden anniversary gala, or even a funeral.

Renovating a House

When it comes to large home improvements, such as a kitchen or bathroom remodel, you can either choose a personal loan or a home equity line of credit. 

You may be able to receive a little better interest rate and a greater spending limit with a HELOC if your credit is good and you’ve been in your home long enough to have adequate equity. However, home equity loans come with the danger of losing your home if you can’t make payments. 

A personal loan can be a wonderful financing choice if you don’t want to use your home as collateral or if you’ve only lived there for a few years.

Conclusion

When applying for a personal loan, a lender will make a hard credit inquiry to review your credit history and score. This results in a minor drop in your credit score, but don’t worry. It usually rebounds within a few months if you pay all of your bills on time.

If you need a quick personal loan in Henderson, don’t hesitate to go to River City Pawn. We are a reputable pawn shop in Kentucky that can loan anybody money regardless of credit score or history. Contact us today to learn more about our pawn loan service.