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by Chris Blakeley February 2nd, 2021

A Guide to Borrowing: When to Get a Loan and Why

Have you been dreaming about renovating your home? Are you still longing to visit Greenland to see the magnificent Northern Lights? Have you put everything on hold due to a lack of funds?  Are you worried that taking a loan to make your dreams come true might affect your credit profile? Did an emergency expense come up, and you’re concerned about how to cover your bills this month?

If you’ve answered ‘yes’ to any of these questions, you’ve landed at the right place! 

In this blog, we will shed light on when to get a loan and how borrowing can help you achieve your goals AND simultaneously build your credit profile.

Your Fast Guide To Help You Decide When To Get A Loan

Sometimes personal loans don’t make sense for your expenses, and sometimes they can help you when you need to make ends meet. Here we go over what a personal loan is, 

What is a Loan?

A loan taken out for personal reasons is called a personal loan. Unlike car loans and mortgages, personal loans aren’t set for any specific purpose, but you can use them to satisfy all your personal needs. 

A personal loan can also be called an installment loan. A lender will give you a lump sum of money and require you to repay it along with interest in fixed monthly (sometimes weekly) installments until the loan period expires and you have paid the principal amount in full.

To qualify for most personal loans, you must have a minimum credit score between 610 and 640. A lender will judge your ability to repay the loan based on your credit score. 

However, many installment lenders like us at Credit Fair-E won’t do a hard credit check, and we look at your ability to repay, rather than just your credit score. Our goal is to help you rebuild your credit and get you out of the cycle of borrowing and debt.

When to Get a Loan for Personal Needs

You must only take a personal loan if it is your least expensive borrowing option. If you don’t have any collateral and all other borrowing options require security, you must consider a personal loan. If you don’t qualify for a zero or low-interest credit card or have enough limits on your current credit cards, only then must you consider getting a personal loan. 

Here are four circumstances when you might consider getting a loan:

  1. Home improvement: If you plan on renovating your home, buying new appliances, installing a new furnace, or making a big purchase for your house, you should consider a personal loan since it might be a cheaper option than using your credit card.
  2. Credit card debt consolidation: If you owe a substantial balance to a credit card company with high-interest rates, taking a personal loan to write off that balance can save you money. Personal loans have much lower interest rates than credit card loans. Consolidating credit card debt can allow you to pay off the balance faster and pay less interest in total. 
  3. Major life event: A significant life event, such as a wedding, an engagement, a bar mitzvah, or an anniversary party, is less expensive to host with a personal loan than through a credit card. If you are thinking of taking a trip of a lifetime, taking a personal loan is not a bad idea at all! 
  4. Credit score improvement: Taking a personal loan and repaying it on time can actually help you improve your credit score. If your credit score has dropped and you need to increase it a bit, consider taking personal loans and pay them on time. If you have more than one loan and consistently make on-time payments on them, it shows your ability to handle debt responsibly and reflect your credit report well. 

Where to Get a Loan in 2021

Time is money, and sometimes that means there is no time to waste. If you need a fast loan to help you quickly pay off an emergency situation or just help pad your budget as you figure out your finances, Credit Fair-E might be the solution you need. We can get you access to funds in as little as 24 hours. Regardless of whether it’s an emergency or you just need a little extra help until you get paid again, we have some great solutions to help you get the money you need, right when you need it. Your financial future is important to us – we don’t want you to stay in the debt cycle. We only give you what we know you can pay back.

Contact the experts at Credit Fair-E today! We offer personal installment Direct Lender Loans, Cash Loans, Payday Loans, and Fast Loans that fit our clients’ budgets to help them break their cycle of debt. Our fast application process and the fact that we give you an immediate response can help you secure funds in 24 to 48 hours! Click here to apply for a loan now

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