Personal loans have been popular in Singapore these past years where people use it in various ways. What’s great with personal loans are that it has a low-interest rate compared to other loans hence making it a good deal for all the borrowers.
When using personal loans, you have our own choices on how you are going to use it, and there are some who were able to use their personal loans in great ways while there are also some who wasn’t able to maximize the use of their personal loan.
Having a personal loan is responsibilities where you have to make repayments every week or month thus you have to make sure that you can properly use the money. So, what are the best and worst ways you can use our personal loan?
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Best Ways to Use a Personal Loan
● Home Improvement
Personal loans have different types, and one of them is the renovation loan. Through a renovation loan, you can now have funds for your home renovation. If it happens that you already have savings for your home renovation but isn’t enough, then getting a personal loan to complete the money for your renovation is a good idea too.
Some may see renovation as minor but what they didn’t know is that home renovation does also have its benefit aside from the improvement of your house’s look rather, it can also increase your house’s value which makes it a good investment as well.
● To Pay Off Debt
There are already many people today who choose to apply for a personal loan so that they can pay their other debts. Most items being bought with credit cards have very high interest rates, and if you didn’t pay the credit amount right away, this interest would increase over time hence getting a personal loan that has, and the low-interest rate is a good idea to pay this debt.
It can also be used if you have several loans and you want to pay all of these loans, therefore, having only one personal loan rather than facing a lot of loans at one time.
● Educational Development
This is surely the best way you can spend your personal loan with. Education for college, university or music lessons may be expensive, but after finally finishing a degree, all the hard work and money you’ve spent to finish your studies would all be worth it.
Education is also a great investment where after getting a diploma, you would have a higher chance of getting a good job where you will earn more money. There are also some instances where there are programming boot camps that could help you enhance your skills and most of them also give certificates after the event which you can present when applying for a job.
There are indeed a lot of ways on how we can use our personal loan to improve not just our living but our confidence as well. So why settle down to low paying jobs when you can reach your dreams and get the salary you deserve?
Worst Ways to Use a Personal Loan
● Medical Bills
There is sometimes where you are bombarded with medical bills, and you don’t know where to get this amount of money hence thinking of getting a personal loan instead. Well, a personal loan may sound like a great idea for this matter, but we have more options.
Medical providers usually have their payment plans which you can choose instead where you will be offered a lesser or even a zero interest rate as long as you will pay on your repayment schedule.
● Car Financing
Just thinking of buying a car already makes you excited thus some car owners would go for a personal loan immediately without thinking twice. It may be easier to apply for a personal loan, but if you wanted to be practical, then you should consider having an auto-financing loan instead.
A personal loan has an annual interest rate of 13-15% while an auto-financing loan only charges 3% a year which makes it cheaper and practical.
● Wedding or Vacation
It may be a good idea to have a personal loan to pay for a wedding or vacation but if being sensible, saving money for this kind of events are more appropriate. These kinds of activities need a big amount of money and borrowing money that will be paid for years is surely a burden.
If you wanted to have a great wedding and you can’t reach it without getting a personal loan then, you should consider having your wedding on a minimum level where you will be borrowing a smaller amount of money; this way, you can afford the repayment amount.
Getting a personal loan is surely tempting for those who are used with loans, but we also must think twice whether the reason why we have the loan is worth it. Repaying a loan would take us years and so choosing where we are going to invest and put this money is very important.