What is a Benefit of Obtaining a Personal Loan? 7 Reasons to Get One

There are many reasons and benefits for getting a personal loan. Click here to learn about some of the common benefits of obtaining a personal loan.

The US banking industry collectively makes 250 billion dollars every year. Much of that money is brought in via interest charged to consumers and businesses on loans.

So, just how popular are loans amongst Americans? As it turns out, very popular.

The average American carries about $40,000 in loan debt.

That reality often prompts the following question: "What is a benefit of obtaining a personal loan?"

To answer that, we break down the seven most common reasons why people choose to pursue loan products so you can see first-hand the value that loans bring to lives.

1. Consolidation of Debt

Ask a financial advisor, "What is a benefit of obtaining a personal loan?" We almost guarantee you that the first answer they're going to give you is debt consolidation.

Debt consolidation is a powerful thing because it allows you to simplify your financial life while immediately saving you thousands of dollars in interest payments.
The way debt consolidation works is simple:

If you have five different loan products that charge between 25% and 28% interest and find a new loan product that's large enough to buy out all of your existing debt at an 18% interest rate, you choosing to buy out your debt is called consolidating.

With your new, single-loan, you're now paying one lender less money than you were paying your last five collectively.

2. Car Repairs

When people's cars break down, it represents a huge problem if they don't have the cash for repairs and a rental.

Why?

Because without a car most people can't go to work. If people can't go to work, they can't make the money that they need to fix their car.

Bit of a catch-22, right?

Fortunately, personal loans can step in to break cash-poor people out of that vicious cycle.

3. Home Renovations

Few people have enough cash to buy the home of their dreams. In most cases, people will purchase a house with good bones and then make renovations as they go.

For some, the wait of saving up money for renovations can get to be too much. Instead, they choose to take out a loan, renovate today and pay down their renovations on a monthly basis.

Personal loans for renovations are very common and some bankers even offer specific renovation loans. The government also offers special home renovation loans that you can bake directly into your mortgage.

4. Weddings

Today's wedding costs the average American couple $30,000. Unless a person is absolutely flush with cash, most people that are going to foot a $30,000.00 bill will have to borrow that money.

Therein lies a key benefit of unsecured personal loans that don't require collateral and can have money wired into your wedding account within 24-hours.

5. Moving Expenses

Millions of people pick up and move every year. Most people make those moves to chase down new job prospects.

One of the biggest caches to moving for a new job is that it costs a ton of money to move to the place that you need to be in order to make a ton of money.
But... What if you don't have a ton of money, to begin with? How can you pay to get to the place that you need to be in order to secure better financial opportunities?

At this point, we're sure that you can probably guess that taking out a personal loan is the answer. For many people, it is.
Filling out a personal loan application and getting a speedy approval can get you all of the money that you need to hire packing services, moving trucks and more.

6. Medical Costs

It's no secret that America has some of the highest healthcare costs in the modern world. The vast majority of people who get treatment uninsured can't possibly expect to pay for care out of pocket.

Given that reality, personal loans allow people to get the care that they need and pay down the ensuing debt in small payments.

While taking out loans for medical care is a far cry from a good solution when it comes to providing people with access to health services, for now, loans are what enable people of lower economic means to get the medical attention that they need.

7. Vacation

When you consider write-ups that talk about how stress and burnout can crush your work and personal life, it stands to reason that going on vacation is a huge investment in yourself.

If you can't afford all of those plane tickets, hotel rooms, and activities out of pocket, you can rely on the benefits of personal loans to help you fill in the gaps.
Thousands of Americans leverage loans to travel every year. If you're hankering to get away for a little while, we recommend that you consider doing the same thing.

Wrapping Up What Is a Benefit of Obtaining a Personal Loan?

What is a benefit of obtaining a personal loan? As it turns out, there's no single benefit. There are many.

Personal loans let people get health care. They help people to fix up their homes, their cars and even enable millions to go on vacations.

Bottom line: When used responsibly, personal loans let people live better lives. We hope that the loan inspiration that we've laid out for you above will move you to use borrowed money in new and interesting ways that work to empower your existence.

Our blog is all about living life without limits. If you'd like to learn about new ways to keep opening new doors for yourself, continue reading our content!
 
 
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