4 Common Reasons to Take Out a Personal Loan

Borrowing money is essentially borrowing from your future. The money will have to be paid back, likely with interest, so you need to be sure you are taking out the loan for the right reasons. This means you should only take out a loan for items and expenses you can afford to pay back in a reasonable amount of time; you want to make sure you will not fall behind on monthly payments. Keep in mind that personal loans are one of the few forms of unsecured credit available to consumers.  

Personal loans come with fixed repayment terms, including interest rate and loan length. Below are a few of the right reasons to take out a personal loan.

Buying a car

The majority of Americans take out a loan when they purchase an automobile. Interest rates for auto loans are typically lower than those for personal loans. Car loans usually are granted for new or newer vehicles. Banks typically, however, shy away from offering auto loans for older vehicles with lower resale value, as the collateral is not worth much. But, not to worry! If you’re unable to get an auto loan, you can take out a personal loan.

Medical expenses

Few expenses accumulate faster than medical bills. Taking out a personal loan may be necessary if you’ve suffered a serious illness that requires hospitalization. Before taking out a loan to cover medical expenses, verify what amount insurance will pay and how much you’re able to realistically pay out of pocket or savings. Use a personal loan to pay the remainder of the bill so as to keep collection agencies at bay. Another plus is you’ll improve your credit score as long as you make your loan payments on time.

Vehicle Repairs

If you’ve ever been involved in a vehicle accident, you probably know that auto insurance often doesn’t cover all the necessary repairs. You can take out a personal loan to guarantee your vehicle is repaired and quickly back on the road.

Debt consolidation

Taking out a personal loan to consolidate high interest credit card debt is one of the most worthwhile reasons to get a loan. Though you’ll still have payments to make, you’ll save a great deal of money in interest fees all the while making your monthly payments more manageable.

Connect with us!

If you would like to learn more about the process of obtaining a personal loan from Citizens, or if you would like to learn more about other types of loans we provide, we encourage you to contact us today or stop by any of our convenient locations. You can also get the process of applying for a loan started now, simply fill out our online application form and a friendly Citizens representative will contact you!