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How to Save Up for Special Celebrations

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Celebrations like birthdays and holidays are often expensive, especially if you want to make it a special time for your family. Luckily, taking some time now can save money later. Having a budget will help you prepare while ensuring you don’t spend more than you can.

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Understanding The Pros And Cons Before You Take Out A Quick Loan

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I’m sure you know how difficult it can be to make ends meet in these tough economic times. If your car breaks down, or if an emergency arises, and you need money fast-you may not have the luxury of waiting for a paycheck to come in before you get that loan. You want to act quickly, but don’t want to take on more debt than necessary, either. That is why it is important to understand what happens when you take out a quick loan from a payday lender.

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6 Reasons Why Getting a Personal Loan is a Great Option

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Managing your finances can be a little tough. People sometimes have a tricky financial situation depending on their spending habits and income. They tend to go for loans to get the stability they need and quite often it’s through personal loans. In fact, getting a loan has a lot of perks and advantages. 

So, we’ve come up with 6 reasons why you should consider applying for a loan.

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The Pros And Cons Of Getting A Personal Loan

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People take out personal loans for various reasons. But there’s one thing for a fact. Personal loans are less common compared to credit cards. In the US, for instance, only 10% of the citizens apply for personal loans compared to a soaring more than 60% of the population applying for credit cards. Nonetheless, the popularity of personal loans is increasing every day.

So what exactly are personal loans and why should you consider (or not consider) taking one?

Personal loans are quite different from credit cards. The loans are obtained from banks, credit unions and other financial institutions and they require monthly payments over an agreed upon period of time. They are also a type of installment loan. The loans have a term of between two to five years, but this term can be less or higher depending on the loan amount and your agreement with the lender.

The Benefits of Personal Loans

The Loans Can be Used for Different Purposes

There are loans, like mortgages, student loans, auto loans and many others that have restrictions on usage. But with a personal loan, you can use the funds for any purpose. Just ensure that the money is used for a productive project to manage repayments.

No Collateral Required

Some personal loan lenders may need collateral for you to secure the loan but most of them don’t. They can, therefore, be a good option for those who do not have any asset to secure the loan.

You Can Qualify for Large Amounts

Personal loan limits range from $500-$100,000. It is, therefore, possible to borrow huge sums of money if you have large projects to undertake. There are other lenders, like Bonsai Finance who offer the loans with a limit of $500 to $5,000 and they also have flexible terms.

Affordable Rates

Personal loans also have lower rates when compared to credit cards. Provided you have a good credit score, the rates can be as low as 5%.

Disadvantages of Personal Loans

Fixed Payments

With credit card debts, you can take your time for you to pay off your bills, but personal loans require timely payments. If you do not pay the loan, you may risk losing your collateral or if it is an unsecured loan, you can be sued for failure to repay the loan.

Prepayment Penalties

If you apply for a credit card, you can avoid paying interest provided you pay off the balances on time. But when it comes to personal loans, paying the loan before the due date tends to attract a prepayment penalty and this can increase the total cost of the loan.

Personal loans can be a good option if you need funds for carrying out your personal projects. But these loans can also not be suitable for every situation. You, therefore, should do the math to ensure that you can afford to pay the debt on time. If not, you can consider other borrowing options to avoid hurting your credit score by defaulting or making late payments.