If you’re someone who has been moving between two countries within a year, it is taken for granted that you will be low on funds. You must have exhausted your savings and now if you have any big expense to make, where will you get the money from? If you don’t have enough savings now, who should you take resort to? Your elders might suggest you to seek help of a personal loan as there are different types of loans to choose from. From paperless loans to cash advance loans to peer-to-peer loans, there are several types from which you can choose.
Now that you’re standing on the threshold of your life when you have to get help of a third-party organisation, you should know the benefits that you may reap from taking out such loans. Here are few that you can keep in mind.
#1: Personal loans carry low interest rate as against credit cards
In most cases, personal loans tend to carry lower interest rates as compared to credit cards. This is truer if the borrower has got a stellar credit rating. If you choose a credit card, it is very common to pay 15% APR and this can even increase to 22%. As against this situation, you can even be able to qualify for a personal loan which has got an APR of 6%. Now you can understand the big difference in the rates and hence the money that you can save in the process.
#2: Personal loans can be used for different purchases
The benefits of personal loan include the fact that you can utilize your cash for any possible reason. While you can use the proceeds for renovating your home, you can use it to buy a car or even initiate a business. On the contrary, there are other types of loans which might have restrictions on the way in which the funds have to be used. Personal loans are much more flexible.
#3: You can smooth your flow of money
There are many who have used personal loans to repair their cash flow. When you know that you have a client who might not pay on time, these are the times when a personal loan can come in handy. In case there is a gap between your income and expenditure, then too a personal loan can be an appropriate option. Another alternate way of obtaining such loans is by getting a personal line of credit.
#4: Personal loans boost your credit score
In case you still couldn’t build enough diversity in the kind of credit that you’ve used, a personal loan can certainly help you. They count on your credit score in terms of the different types of accounts that you have. Hence, they can also play a role in boosting your credit score.
Therefore, if you’re someone who is still not sure about the ways in which a personal loan can help you, you can take into account the above mentioned benefits or show them these financial tips to help them make an informed decision.