Tuesday, June 30, 2015, PM | 4 Comments
I use credit card all the time even for a gallon of milk at the corner convenience store as long as the business would accept it. We needed a new roof. We charged the expenses to two credit cards, paid the labor charges with personal checks. Fortunately, we were able to pay the charges in full before the due date.
However, many folks are unable to pay the bill in full by the end of the 2-to-3 weeks grace period that the credit card company offers to everyone.
Some just pay the minimum every month and the interest on top of the principal keeps getting bigger. Eventually, with new purchases, the debt keeps getting out of control and the household have no choice but to declare bankruptcy.
However, a time comes when you need salary loans in your personal financial life. Maybe you need it for a new roof (like we did) to replace the old rotten one, perhaps for your child education or may be some other needs (but not wishes) that you have to fulfill.
In that case, you need a personal loan. There was a time that loan seekers had no choice but to go to banks or credit unions to apply for a personal loan, however big or small it was.
Many time getting loan fro these traditional financial institutions is like one’s way quickly or awkwardly up a steep slope or over rough ground by using one’s hands as well as one’s feet.
There’s no need to go through all the hassles of applying to these institutions and eventually be rejected because of lack of good credit history.
Luckily with the advent of the Internet and the many choices available to us, new companies are changing the way you’re evaluated for a personal loan.
The Internet allows you to search for options from the comfort of your couch and without hurting and lowering your credit score.
Take a vacation from high interest rates that come with credit cards. Personal Loan fixed rates start very low and variable rates start even lower.
Historically, the interest rates charged on using credit cards is way over 10% whereas personal loans can be had for a lot lower interest rate.
If you’re paying more than 10% interest on your credit cards, then a personal loan with lower interest rates can help you save hundreds even thousands over the life of the loan.
With low rates and a fixed monthly payment, you can pay off high interest debt, like credit cards, or make a major purchase. It only takes minutes to apply.
More Advantages of a personal loan
Low-cost loans for the financially responsible.
You get cash. You can only use a credit card in places where it is accepted. If you’re doing projects like home improvement, it can be very difficult to find contractors who accept credit cards. Being able to write a check against your account in the bank can be a big benefit.
Interest rates are usually much lower than credit cards. Folks with excellent credit can now borrow for as low as 4%, many times with no origination fee. But the savings are just as good for people with lower credit scores.
The application process is much simpler. With most business loan, you can do a short application – using what is known as “soft pull” – to see if you will be approved. This process does not affect your credit score, meaning it makes it easy to comparison shop and find the best deal.
Personal loans help your score, especially if you are paying off existing credit card debt. 10% of the FICO score relates to having different types of credit, like a personal loan. Therefore, by paying off your existing credit cards, you are reducing the utilization and improving the score.
You can prepay at any time, without a penalty.
Personal loan companies are willing to accept people with much lower credit scores, on average, than credit card companies.
Warning for using any kind of credit…
Borrowing money is like renting it, whether it’s using credit card or personal loan. The money belongs to you only for certain fixed duration. Anything in life you rent, you must pay it back to its original owner. Use it but never abuse it.Facebook.com/doable.finance