When Is The Right Time To Get A Personal Loan?

3 min read By eCompareMo on July 1, 2015

Getting a personal loan is easy: you simply have to compare the rates from different banks and get the one with the best interest rate. While applying for personal loan is easy, looking for the best time to apply for one is the hardest. How do you know if it is high time for you to borrow money from the banks? Fortunately, there are indicators that can tell you when the perfect time to get a personal loan. What are the instances where getting a personal loan is the perfect solution for your woes?

Repayment of another loan with higher interest

Experts say that borrowing money to pay off another debt is not advisable, since it will not liberate you fully from your financial obligations. However, one instance where you can circumvent this rule is when you have an outstanding debt and the interest of getting another personal loan to settle it will save you a lot. If you think that a new loan will allow you to save interest rate because your existing loan has a higher interest, then don’t hesitate to get one. When you’re done with your loan, you can get a good repayment history with both your loans and you can instantly boost your credit score.

Debt consolidation

If you’ve put yourself in a ditch where you have to face multiple debts from different creditors, then either a miracle will save you from totally hitting rock bottom or settling them all at once. Fortunately, both are possible when apply for a cash loan to pay off all your debts and just settle a single, unified debt with a single interest. Called debt consolidation, you can use a loan as an instrument of repayment of all your current debts. With debt consolidation, no more varying due dates and interests; just pay one single debt and everything else will be settled.

Tuition for higher education

At some point in your career, you may start to feel like you need to step up. Sometimes, the best way to do it is to enroll in a new degree or pursue higher education. However, you may be restricted by your current financial responsibilities and paying your tuition may be out of the question. With personal loan, you can pay your tuition upfront and only worry about your education—and your debt repayment, of course. However, only get a salary loan for your graduate school dreams if pursuing it can give you a career boost, which will mean that the personal loan is a good debt.

Read: Not Enough Tuition? We’ve Got You Covered!

When is not the right time to get a personal loan?

While there are good instances where personal loan seems to be a viable solution to your woes, there also are moments where getting a personal loan is a horrible idea. Here are the worst reasons for getting personal loan.

1. Buying consumer goods. Do you fancy one of the brand new shiny phones in the market? Or are you planning to make a living room upgrade and spruce up your viewing experience with a 72-inch 4k television? If you are planning to get consumer goods that are merely expenses, then forget about getting a loan and save for it.

2. In case of emergency. Whenever we hit the panic button, it is easy for us to make rash decisions without thinking straight, especially when it involves financial matters. During times of distress, do not even think about borrowing money just to get out of your current situation. After all, you don’t want to wager your chances to a loan, which is still subject to approval.

Read: In Case Of Emergency: Where To Get Calamity Loans And How To Apply For Them

3. Travel money. It’s fun to go overseas for a vacation; after all, visiting a new place is something one should experience in his lifetime. However, if you are planning to borrow money just to splurge on your trip overseas, then forget about your travel and just think of better areas where you can use your personal loan.

Personal loans are great financial tools that can help you achieve financial freedom, provided that you know how to use them right. If you can utilize a personal loan well to give you an edge over endless waves of expenses, then apply now for a personal loan and start your road to financial freedom.