Personal Loans 101: Reasons Why You Need It


There can be a lot of reasons why individuals opt to get a personal loan. If you are one of those individuals, be mindful that your loan purpose may affect the size, rate, and repayment term of the loan you applied for. Below are reasons why individuals apply for a personal loan – and if you have one of these reasons, then you might as well opt to get a fast cash loan.

  • To refinance existing debts – A lot of unsecured personal loans are debt consolidation loans that are being taken out for the express purpose of merging many existing loans or lines of credit into a single loan and often at a lower interest rate. The reasons why people go for debt consolidation loans are:
    • It is easier to manage than the multitude of credit lines they replace.
    • They are much more predictable since they are installment loans with fixed payments.
    • They may have a lower monthly payment and most of the time when they join credit card debt.
  • To finance a major one-off expense – there are various reasons to get a personal loan to finance a major one-off expense, such as:
    • Transportation – When you buy a new or secondhand car from a dealership, you will get a lower rate and smaller monthly payment plus a secured vehicle loan. While an unsecured personal loan may be your best bet in a private-party transaction which conventional lender will not finance in a direct state. You may then use your loan’s proceeds to fund a cash withdrawal or a bank check issue.
    • Home improvement – If you need your home to improve, getting a personal loan can be the choice. An unsecured loan may be your best bet to finance your home improvement project such that you may use your loan’s proceeds to fund project-related expenses through a debit card or rewards credit card ties to the funding account as long as you pay any credit card balance in full each period of the month.
  • To cover unexpected major expenses – You might want to consider a personal loan for these unexpected situations since many online lender fund loans the same day that you accept their loan offer while others fund between two business days. Scenarios can be of the following:
    • Medical bills
    • Emergency transportation vehicle repairs that are not covered by auto insurance
    • Urgent home repairs
  • To start or expand a business – You won’t need to apply for a commercial loan if you want a certain amount to fund your starting business or jumpstart your career as an entrepreneur. An unsecured loan can deal with your needs, provided its principal is enough to cover your initial startup costs.

            Whether you found your reasons on the list or not, applying for a personal loan when a situation arises and you need fast cash will be the best deal. With countless money lenders found in your area, you can find someone who can keep up with needs and money demands!