September 14, 2017
Organizing and staying on top of your finances can be exciting but it can also be a real headache. Whether it's because of a budget misstep or financial emergency, it's all too easy for financial trouble to snowball into overdue bills and too much credit card debt. But fortunately, it's possible to recover from any mistake with a bit of patience and planning.
One great tool for getting your finances in order is a personal loan. While you may be wary of taking out a loan, hear us out, because a personal loan can help with a lot of financial problems.
What is a personal loan?
A personal loan is simply a loan that, as the name implies, can be used for any kind of personal reason. You could use it to pay off unexpected bills, pay for vacation, or even fund your wedding. These loans are unsecured, so unlike with a mortgage or an auto loan, your home or car aren't collateral. This means that a personal loan will come with a higher APR— but it's usually still lower than what you would get on a credit card barring promotional incentives.
What can a personal loan do for me?
The moderate rate is what makes a personal loan an appealing option for managing your finances. Whatever you may need money for, you can take out a personal loan which will allow you to pay it off over time at a lower interest rate than many other sources.
Here are a few things you might consider taking out a personal loan for:
Taking a vacation. Instead of shelling out cash up front for your dream vacation, keep your cash and consider taking out a personal loan to finance it. You’ll need to do the math to see if the amount of interest paid would be worth getting to keep cash on hand. You never want to deplete your emergency fund for anything other than emergency and while sometimes you may feel like taking and “emergency vacation” – it’s never wise to dip into those funds.
Do some home improvement. A pricey home improvement project can be difficult to afford if you don’t have enough equity in your home to take advantage of a low rate home equity loan, but a personal loan will let you get it done now.
Paying for emergency expenses. You can use a personal loan to pay off outstanding emergency expenses, like unexpected medical bills.
In short, a personal loan can be used for just about anything you want. You simply use the loan to pay for what you want and then pay it back over time at a modest APR — which makes it easier to afford the things you want.
How a personal loan can help organize your finances
Beyond the low interest rate, a personal loan can also help by simply organizing your finances. It can be tough to keep track of multiple bills from different places, and a personal loan turns all of those little bills into one simple monthly payment.
If you're juggling too many bills to keep track of, having just one payment a month can make a big difference. With just one monthly bill, it's easier to be sure you're paying on time which helps keep your credit in good shape.
Why use a personal loan instead of a credit card?
Credit cards can be a good short term solution to pay for anything you need — but interest payments can add up if you don't plan on paying them off quickly.
That's where a personal loan comes in. For any expenses that you're more likely to pay off in years rather than months, the lower APR on a personal loan can save you a lot of cash, which could help make it easier to get out of debt.
Consider a personal loan from PenFed
PenFed offers low APR personal loans from $500 to $25,000. You can choose a loan term as low as 36 months to pay it off quickly, or stretch it out as long as 60 months to give yourself lower monthly payments. You can get your money as soon as the next day, so why not apply now?