If you suddenly find yourself facing unexpected expenses or if you are looking forward to starting an expensive personal project, you might consider getting a personal loan. A personal loan is a great way to pay for a variety of things, but it’s not the perfect solution for every purchase. In this post, we’ll take a closer look at what a personal loan is, how it works, and some common situations in which personal loans are the right way to go.
What is a personal loan?
Personal loans are unsecured loans that are usually used for large purchases, emergency expenses, debt consolidation, and more. Since they’re unsecured, you don’t have to put anything up as collateral, unlike a home loan or car loan. However, if you do not pay your personal loan on time, your credit score may suffer or your loan may default.
How do personal loans work?
To receive a personal loan in Ohio, you will need to apply for a loan from a lender. After you are approved, the total amount of the loan is deposited into your account. This process can take up to three days or it can take up to 24 hours. Once you get your loan, you are expected to pay monthly installments. Most personal loans in Ohio have fixed interest rates compared to credit cards, which makes them a less expensive option in many cases.
5 reasons why you need a personal loan
Here are some of the most common reasons for obtaining a personal loan in Ohio.
1. Debt consolidation
Debt consolidation is a common reason for obtaining a personal loan. If you’re paying off several high-interest loans or credit cards at once, consolidating them into a single personal loan is smart. An Ohio personal loan typically has a lower interest rate than most credit cards, and a single monthly payment is much less stressful than multiple monthly payments.
2. Emergency assistance
An emergency can take many forms. Whether it’s an unexpected medical bill, car repair, or funeral expenses, a personal loan can ease your financial burden and provide peace of mind. Even with health insurance, some medical procedures can cost thousands, an amount most people simply don’t have. Funeral expenses in Ohio can range from $8,000 and the payment is often an advance for burial services.
3. Home improvement projects
Owning your own home is a great pleasure. However, the repair and improvement projects that come with owning your own home can be a little pricey. Many homeowners choose personal loans to help fund these expenses over a home equity loan because they don’t have to put up their home as collateral.
4. Large purchases
If your refrigerator has bitten the dust or you suddenly need a new laptop computer, a personal loan can be an absolute lifesaver. Home appliances, computers, and other equipment are very essential in our daily lives, but cost can be a major barrier to replacing these items. A personal loan mitigate this cost, allowing you to purchase the items you need without paying a large amount up front.
5. Wedding expenses
The average cost of a wedding in Ohio was about $22,026 in 2017, a number that has definitely gone up over the years. Unless they’re specifically saving for their wedding, many happy couples simply don’t have that kind of cash. If a big wedding has always been your dream, then a personal loan can take the pressure off expenses so you can enjoy your special day in peace.
When not to get a personal loan in Ohio
Although a personal loan is suitable for a wide variety of situations, there are times when you should not take out a personal loan.
- You cannot afford the monthly payments. This should be a no-brainer, but if you can’t afford to pay off the personal loan month after month, you shouldn’t get a personal loan. If your monthly budget is really tight, a personal loan may not be for you.
- You have bad credit. If you have a low credit score, you are likely to have a high interest rate and have a hard time finding a lender. However, some companies, such as the American Loan Corporation, offer bad credit personal loans to help individuals with bad credit. These loans often help improve your credit score as well.
- You don’t need it. Do you want to treat yourself to an expensive vacation just because? Want a cool new touch screen refrigerator even if you already have one? A personal loan is not a smart choice in these cases. Personal loans are very useful for covering unexpected and necessary expenses, but you don’t have to go into debt if you don’t have to.
- You qualify for better options. There are other financing options available that are better suited to specific situations. When buying a house or a car, or paying for your education, there are specific loans that come with benefits specific to those situations. A mortgage, student loan, and auto loan are often better than personal loans.
Personal loans pave the way to financial stability
Personal loans can be used for a variety of reasons and can be very beneficial. If you think you qualify for a personal loan in Ohio and are ready to take the next steps, fill out a personal loan application online or visit one of our local branches. American Loan Corporation wants to make the process of applying for a personal loan in Ohio simple and stress-free. Cover your financial needs, build your credit, and get back on track with a personal loan today.