What are Personal Loans, and why can they be a great option?
A lot of people have the misconception that personal loans are only taken out by people with bad credit who needs quick cash in an emergency. But that’s really not the case!
We’ve seen clients take out one of our quick loans for emergency purposes of course – no one plans for a burst car tire after all! However, we’ve also seen clients boost their holiday with a nicer hotel with a small loan, or ‘buy now pay later on a special Valentine’s day gift for that special someone.
Many types of people use personal loans all the time, and this blog is aimed at explaining what a personal loan is, and how it can be a great option for you.
So what’s a Personal Loans Anyway?
Let’s cover some basics first.
Credit comes in a lot of forms. You might associate the word most with credit cards, but it’s also what mortgages, car loans, financing over time, and personal loans. Different types of credit serve their purposes for your goals. Whether it’s to break up a really big expense (like a home loan or a car loan) into more manageable monthly payments or to make tracking your financing easier, credits are there to do whatever purpose you have for them.
A personal loan is a type of credit that can help you get spending. Because of some of the features that a personal loan has, many people prefer using a small personal loan to help with large purchases or consolidate multiple credit card debts because ultimately you pay less during your repayment terms. Obviously different circumstances apply to every individual.
We’ll go over a few benefits of a personal loan now.
Large Purchase? A quick cash loan can save the day. When you’re making a large purchase in-store, you might not have enough cash in hand to buy the item outright. The salesperson is giving you some options, like store credit accounts with a high rate of interest, but you see the interest rate or an early payout fee and you’re raising some eyebrows. This is where a personal loan can help! Depending on your banking institution, microlenders like My Pay
Stat (powered by Capital & Centric Funding ACL 532474) may be able to provide you with a quick loan, freshly deposited into your bank account at competitive rates in the market. A personal loan gives you some breathing room in your budget to buy now, and pay later tailored to your financial needs.
Consolidating your bills – made easy through a quick loan
Are you that person with a tonne of credit cards and credit accounts, and you’re faced with different rates and payments every single time a new month comes along? Juggling percentages and amounts can be tiring, time-consuming, and frustrating in general. But it doesn’t have to be! By getting 1 easy, competitively rated personal loan, you can pay off all your other debts and just have one, lower monthly payment every month. Not only does that give you some breathing room, but it’s also a lot less stress.
Raise your Credit Score
One of the best things about a personal loan is that your credit score doesn’t define the amounts you can take out. Since our personal loans have a limit of up to $5000, by borrowing and repaying a lot of small loans you never have too much debt to repay while building a positive credit history for yourself. Good credit history can often lead to higher credit scores! With a higher score, you can apply for larger loans – like car loans, or a home loan – with lower interest rates! Approval guidelines and serviceability apply and vary from lender to lender.
Deciding on a Loan
Taking out a loan should always be considered carefully. Like any type of credit, personal loans can be incredibly helpful when you can manage them well. The low-interest rates, easy lending terms, and flexible repayment rates of personal loans can be an attractive and useful option for many who need a boost in their finances now and then. However, when you take on a debt you should always look carefully at your situation and at the people who are offering your loan.
We take our responsible lending obligations seriously. If you’re interested in how Personal Loans work with My Pay Stat, check out our page explaining how it works. Also check out our credit guide, which lists all of our pricing in one, simple document.
What you see is exactly what you get. We don’t believe in frills and fancy language.