Almost 80% of Americans live their lives paycheck to paycheck. That means they have virtually no savings for those unexpected emergencies or large purchases.
Luckily, there is a fairly easy way for Americans to finance these important things — personal loans.
Personal loans offer a solution to financial issues and help you finance a better lifestyle. Keep reading to understanding what are personal loans used for.
Americans collectively owe over $80 billion in medical debt. And healthcare costs continue to rise.
Let’s face it, you aren’t going to stop buying your insulin or refuse to take your child to the hospital if they break their leg. Instead, these are emergency expenses that you put off on your future self to worry about later.
But at a certain point, hospitals and doctor’s offices won’t let your bills go unpaid any longer. Before the debt goes into collections and wrecks your credit score, you need a solution — and fast.
This is one of the many times that personal loans come in handy. Head over to your local bank or apply for a loan online. Then, pay off the medical debt and instead make manageable monthly payments on the loan.
Never sacrifice you or your family’s health because of sticker shock again.
Home renovations, whether an emergency or not, are a great use for personal loans.
Having you been putting off that kitchen renovation for years now? Did your basement flood and ruin the carpeting and all your storage? Are you expecting another child and need to transform the attic into a bedroom?
Regardless of your situation, a personal loan can help. In fact, we suggest personal loans over home equity loans every day of the week.
With a home equity loan, you’re putting your home up as collateral on the loan. So if you miss a few payments or are unable to pay back the balance, you risk losing your entire home.
With a personal loan, the loan could be sent to collections if you miss a payment. But as long as you didn’t provide any collateral, your assets aren’t at risk.
A personal consumer loan could be used to purchase a vehicle.
The average purchase price for a new vehicle is over $37,000. Odds are, if you’re living paycheck to paycheck, you won’t be able to save up that kind of cash. But you still need a reliable vehicle to get to work and to safely transport your family.
Instead of financing through a car dealership, opt for a personal loan. Car dealerships make most of their money off the financing portion of the business. So they won’t always be looking out for your best financial interest.
With a personal loan, you have the availability to secure a favorable interest rate. In addition, this gives you the freedom to shop around for the best deal, or even buy from a private party.
Starting a Business
Personal loan uses also include starting a business. Every great business idea starts from the ground up. Don’t let your dreams die just because you don’t have the necessary start-up funds.
Instead, secure a personal loan to get your business running. Once your business is established, you can use it to gain more funding through business loans. But, those are often hard to get at first when you can’t show off profits, or even a product yet.
Getting a little bit of cash up-front can be the difference between a successful and failed business venture. If you truly believe in your business plan, a personal loan is the way to go.
Student loan debt in America is crippling, to the point that collectively we owe $1.5 trillion.
Maybe your 18 and fresh out of high school. Or you could be 35 and wanting to chase a new career path. Either way, education is going to cost you — a lot!
Applying for the FAFSA is a straightforward process, but if you aren’t dirt poor, the government isn’t likely to cover all your expenses for you. Most times, your available financial aid doesn’t even come close to covering costs.
So now what? Well, oftentimes students revert to personal loans to get them by.
Most careers require a degree in order to be successful. So while the student loan repayment may sting for a few years — or 10 — it’ll be worth it in the long run.
The great thing about personal loans is that they aren’t limited to just tuition costs. You can use them for textbooks, a computer, and even living expenses.
Big Life Events
Congratulations! You’re engaged. But do you have $30,000 to cover the bill of the average American wedding?
Probably not. But love doesn’t have to wait.
Instead, use a personal loan to cover this big life event. That way, you won’t regret skimping on your big day years in the future. Create the memories that you and your fiance deserve to have.
Personal loans are great for all life milestones, good and bad. Other great uses include:
• Anniversary trips
• Adoption costs
• Funeral arrangements
• Moving expenses
Stop Asking What Are Personal Loans Used For
After reading this article, hopefully, you can stop asking, “what are personal loans used for?”
But before you sign on any dotted lines, make sure you’re finding the right personal loan for your situation. Avoid loans with high-interest rates or unfavorably repayment terms. Take the time to shop around to secure the best loan possible.
Before you make your next big purchase, head over the Buying Guides section of this site. Doing proper research helps you find the right product for the right price, saving you money in the long run!
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