Personal Loans: Flexibility with Responsibility
There may come a time in your life where you really just need cash for something. Maybe it’s to fulfill a lifelong dream, fund a wedding, make emergency repairs to a home or vehicle, or perhaps take a two-week vacation to Tahiti. Whatever it is, you may not have saved enough and now need to borrow. So, what are your options?
|Personal loans are great because than can be used for|
nearly anything, but must be used responsibly.
In recent years, people have been turning to short-term personal loans for everything from vacations and RVs to loan consolidation and home improvements. Personal loans can be used for almost anything. But, just because you “can” doesn’t necessarily mean you “should.”
Personal loans come with higher interest rates, meaning a higher overall cost to you. The interest on personal loans is also not tax deductible since they are unsecured loans. That means you need to keep a few things in mind before you sign for that loan:
- Does taking out this loan fit in with your financial priorities and goals?
- Could you continue saving instead of taking out the loan?
- Will you be able to afford the monthly payments?
While we can’t provide financial advice tailored specifically to you in this blog post, here’s what we would recommend as far as using a personal loan is concerned:
- Make sure it furthers a goal or helps you achieve a goal of some kind. For example, if you need to improve or fix your home and a home equity loan isn’t an option, a personal loan may be the best alternative.
- Have a repayment plan in place. Most people repay a personal loan in 12-18 months. Be sure to have a solid plan in place, and know you’ll have to adjust spending in other parts of your budget to accommodate loan payments.
- Be smart. Sure, a new RV or camper would open all sorts of doors to fun adventures. However, it’s not worth piling up debt you can’t afford. Hold off and save until the time is right.
Loans can be complicated, so if you need help understanding them or if you’re questioning whether a personal loan is right for you, Lincoln Savings Bank can help you sort everything out. We look forward to talking with you soon!