When you should get a personal loan
There is a lot of information online about not taking out a loan, not getting into debt, not using money you don’t have for all the things you don’t need.
And, this is the truth. You should heed this advice as it’s right. Debt hurts you and your family and can cause an enormous amount of stress to your personal life.
What’s worse, it takes a long time to get out of debt, years in fact. Also, credit is paid back at a very high interest rate which means you can sometimes pay almost double the amount back. However, there are instances in which debt can help you. It can help you manage your finances and if you can nab a low interest rate you’ll be sitting pretty sooner than you think.
Exploring ways in which debt can help you and be positive seems counterintuitive.
However, and somewhat surprisingly, there is a lot of information online about how to apply for a personal loan.
Yes, some of it is simply companies trying to get you into more debt so that they can charge you an exorbitant interest rate and pocket an enormous amount of money from you.
But, sometimes, when reputable financial institutions offer personal loans and the like, they really can assist in securing your financial future.
It all really depends on what your debt situation currently looks like. High interest rates are killer and yet we all agree to them.
If you have a retail account, if you recently purchased some Christmas goodies on account to try and make it through the festive season then you’re currently paying interest rates that are high and are probably ranging anywhere from 20 to 27 percent.
If this sounds familiar and you’re currently paying off a number of accounts you should consider consolidating these accounts by acquiring a personal loan with a fixed interest rate that’ll mean you are paying off exactly one amount everything month and it’s unlikely to change. This will also free up some of your money so that you have more expendable income.
Which means that the next time you want to splurge on a spoil or it’s suddenly next Christmas and you don’t want to buy on credit, you will have enough money to cover you. A personal loan will also diminish all the administration fees you’re currently paying on each account and also any late payment penalties.
If you’re really smart the surplus cash you have leftover you can pump into your personal loan. In this way your minimum payment remains affordable but you’ll pay the entire loan off far quicker.
Education is key for everyone but unaffordable for most
Spending money, yes even loaned money, on education is completely an okay thing to do. Educating yourself means that you’re far more employable and even if you are already a working professional, continuing your education is vital in today’s business world. Jobs are scarce and when you have one you need to hold on tight. You don’t want to risk becoming redundant because you lack the education to keep up.
Technology is ever-evolving, business sciences are not even remotely similar to what we learnt in school so if you’re interested in really “making it” out there in the big bad working world then you must prepare yourself by learning more. So, if you’re a student then take out the student loan and fix the interest rate if possible and do the necessary to manage it.
If you’re already working then keep abreast of business trends and technological advances within your industry and if you come across a course that’ll assist you with advancing in your career then take the loan and do the studying thing. Financial institutions who offer student loans, do so because they have an understanding of what their student customers require. They’ll be able to work out a proper plan for you that might take a while to come to an end but it won’t break the bank every month.
Becoming an entrepreneur is a worthwhile expense
Becoming an entrepreneur is often the big dream of many ambitious professionals. Why work to make money for someone else right? In South Africa, in particular, entrepreneurship is heralded as the only way to improve our economical status. To start a business though you are definitely going to require funding and most times that comes from external investments from outside parties.
But even before that you’re likely to need a bit of capital to either set up your basic infrastructure or purchase stock. This means that even if you’re a bootstrapped operation you’re going to be carrying some debt around, your startup debt. And, again, this is okay. But only if you make sure to spend your first bits of profit paying back the loan as soon as possible.