Top 5 Reasons for Personal Loan Applications

Find out why people apply for personal loans and see how you can avoid the pitfalls of debt management

When you’ve maxed out your credit cards and find yourself short on cash, it might be time to consider a personal loan. Why do people take out personal loans? The reasons may vary, but the intent is almost always similar: people take out loans to cover emergency expenses or to pay off their credit cards. In this article, GoBear shows you the common reasons why one would consider applying for a personal loan.

To Consolidate Debt

Roll all your monthly instalments into one payment for convenience and to save on finance charges. By doing this you can save money by restructuring the repayment terms. This will also ensure that you’re paying a fixed rate with fixed monthly instalments and a closed-end term. Smaller instalments also mean that you can stretch out the repayment period to accommodate your resources and budget. Repaying the loan may take longer, but at least you’re sure that you’ll repay it with the means you have available.

To Pay Medical Bills

No one wants to be burdened by illness and the costs associated with it, but it sometimes can’t be avoided — and this is why it’s one of the most common reasons for personal loan applications. The problem with medical emergencies is that they seem to happen at the most inopportune times. Medical expenses can also quickly grow and drain majority of your budget. Before jumping into one, though, check out the current personal loan rates, such as the interest and processing fees, so you really know what you’re getting into.

To Pay for a Wedding

Getting married might be the biggest milestone of your life and, as such, it might also be one of your biggest expenses. If there’s one thing you want to splurge on, this once-in-a-lifetime life event is one of them. Big-ticket items such as the bridal dress and venue are a few of the things that could unexpectedly put you out of budget. Applying for a personal loan before your wedding is a good idea so that you can break up the costs into more affordable instalments. This way you can save some money for other expenses after the wedding.

To Cover Relocation Expenses

A local move may not be that costly, but long-distance relocation is a different story. Sometimes you may need to relocate for a job opportunity, and this can entail a costly move, such as when you need to relocate to another country. Sometimes, the costs can be so high that it’s enough to warrant applying for a personal loan. Not all companies shoulder the relocation expenses of new hires so you may have to foot the bill. Of course, you’ll have to ensure that your new income will enable you to pay off the loan you’ll incur. Other reasons for personal loan applications that are related to this include buying new furniture and appliances and transport expenses.

To Cover Travel Expenses

Vacations aren’t free, and they aren’t cheap, either. A typical family holiday may not cost thousands, but an extended stay abroad or a luxury cruise can easily burn a hole in your pocket if you’re not careful. Exotic destinations can also cost extra so it’s sometimes necessary to get your hands on some extra cash before going on a trip. It’s no surprise that vacations, family holidays, and even honeymoons are common reasons for personal loan applications. It may just be a simple trip for some, but for a few persons, it may be the trip of a lifetime.

The next time you’re considering taking out a persona loan, remember the reasons mentioned above so you have guidelines that will help you make a sound decision. Of course, knowing the common reasons for personal loan application is not enough; you have to do your homework and check out the different personal loan rates and benefits.

 

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