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Here For You – Top 4 Reasons for Taking a Personal Loan
If you need fast cash, whether it’s for an unseen expense or a home remodel, you may consider taking out a personal loan or line of credit from the bank. It can be daunting to borrow from the bank, and many people wonder which situations justify these types of loans.
Opening a personal line of credit is more common than you may think, and your reasons for doing so may be equally common. In fact, according to a recent study, 51.3% of Americans have taken out a personal loan in their lifetime. Many Americans utilize personal loans to cover home improvements, debt consolidation, and other expenses.
While personal loans and lines of credit are different in their interest rates and payments, they function similarly. Let’s take an in-depth look at the reasons people may take out these loans and how they can be beneficial when guided by experts, like those at Troy Bank & Trust.
1. Unexpected Costs
Personal loans can eliminate financial hardships that arise when unexpected costs come your way. For example, personal loans can pay for expensive car repairs, roofing repairs, funeral expenses, medical bills, overdue utility bills, and more. Many lenders offer quick approvals and you can acquire the loan within a few days. Personal loans and lines of credit can relieve some of the stress during tense situations and ease your financial burden.
2. Home Improvements
There are many reasons you may want to carry out home improvements, whether you’re trying to make your home more accessible or looking to increase the value of your property. However, these projects can quickly get expensive. It’s estimated that we spent 353 billion U.S. dollars on home improvements in the first quarter of 2021 alone. Taking out a personal loan can help you make necessary improvements without placing an immediate strain on your finances.
3. Debt Consolidation
Personal loans can reduce the burden of debt and boost your credit. If you’re facing multiple high-interest credit card bills or loans, personal loans can pay off these debts and consolidate your payments into one. You’ll just need to pay off your personal loan, but it often has a lower interest rate. This process is called debt consolidation and is one of the most popular reasons for personal loans, especially if you have good credit.
4. Large Purchases
There are some typical large purchases that personal loans and lines of credit can help cover. Some of these big purchases include moving expenses, weddings, and vacations. If you’re moving cross-country or even just a few cities away, you may need extra cash to finance your relocation. Personal loans can also cover the cost of security deposits, furniture, boxes, and movers during your journey.
While it’s best practice to minimize loans for non-emergencies, personal loans are available for monumental purchases, like a boat, car, or new refrigerator. Similarly, weddings and vacations are irreplaceable experiences but are often costly. Personal loans can cover the costs of airfare, florists, venue rentals, and more. However, we recommend weighing the pros and cons of personal loans for recreational purposes, since your credit score is affected if you don’t make payments on time.
Stress-Free Application for Personal Loans
At Troy Bank & Trust, our experienced bankers work closely with each client to understand their financial goals. We can determine if you may benefit from personal loans and then guide you every step of the way. If you’re considering opening a personal loan or line of credit, don’t hesitate to get in touch today. Begin your journey toward financial freedom with Troy Bank & Trust!
Your Trusted Lender in Troy, AL: Troy Bank & Trust
If you’re facing unexpected expenses or need to make a large purchase, personal loans and lines of credit can cover costs promptly. At Troy Bank & Trust, we work with you to understand your financial goals and make knowledgeable decisions to help your financial future. Call us at 334-566-4000 or contact us online to learn more about personal loans and lines of credit!