- PERSONAL LOANS ARE NOT A SOLUTION FOR MOST FINANCIAL SITUATIONS, SAYS ERIC ROBERGE, CERTIFIED FINANCIAL PLANNER AND OWNER OF FINANCIAL PLANNING WEBSITE BEYOND YOUR HAMMOCK. “MOST TIMES, THEY ARE JUST A BAND-AID ON IMPROPER MONEY MANAGEMENT,” HE SAYS.
- A SITUATION WHERE ROBERGE RECOMMENDS A PERSONAL LOAN IS IF YOU HAVE CREDIT CARD DEBT WITH HIGH INTEREST RATES. PAYING OFF DEBT WITH A HIGH INTEREST RATE, SUCH AS A 24 PERCENT ANNUAL PERCENTAGE RATE, CAN BE DIFFICULT BECAUSE THE MORE INTEREST YOU OWE, THE HIGHER YOUR PAYMENTS WILL BE AND THE LONGER IT COULD TAKE YOU TO BE DEBT-FREE. BUT IF YOU QUALIFY FOR A PERSONAL LOAN WITH A MUCH LOWER INTEREST RATE, YOU CAN PAY OFF THE DEBT FASTER AND SPEND LESS ON INTEREST.
- “ONE BAD REASON TO TAKE OUT A PERSONAL LOAN IS TO INVEST IN THE STOCK MARKET,” HE SAYS. “THERE IS NO REASON TO GO INTO DEBT JUST TO GET MONEY IN THE MARKET. SAVE AND THEN INVEST.”
- SOME OF THE WORST USES FOR PERSONAL LOANS ARE VACATIONS, WEDDINGS, ENGAGEMENT RINGS AND OTHER UNNECESSARY EXPENSES. IF YOU’RE HAVING TROUBLE SAVING FOR AN EXPENSE LIKE A WEDDING OR VACATION, DELAYING IT UNTIL YOU CAN PAY FOR IT IN CASH IS A BETTER OPTION THAN A PERSONAL LOAN.
- PERSONAL LOANS ARE ALSO NOT A GOOD IDEA FOR HOME REPAIRS. IT’S USUALLY BETTER TO USE THE EQUITY BUILT UP IN YOUR HOME, SINCE SECURED LOANS USUALLY HAVE LOWER INTEREST RATES.
- PERSONAL LOANS ARE NOT A SOLUTION FOR MOST FINANCIAL SITUATIONS, SAYS ERIC ROBERGE, CERTIFIED FINANCIAL PLANNER AND OWNER OF FINANCIAL PLANNING WEBSITE BEYOND YOUR HAMMOCK. “MOST TIMES, THEY ARE JUST A BAND-AID ON IMPROPER MONEY MANAGEMENT,” HE SAYS.
- A SITUATION WHERE ROBERGE RECOMMENDS A PERSONAL LOAN IS IF YOU HAVE CREDIT CARD DEBT WITH HIGH INTEREST RATES. PAYING OFF DEBT WITH A HIGH INTEREST RATE, SUCH AS A 24 PERCENT ANNUAL PERCENTAGE RATE, CAN BE DIFFICULT BECAUSE THE MORE INTEREST YOU OWE, THE HIGHER YOUR PAYMENTS WILL BE AND THE LONGER IT COULD TAKE YOU TO BE DEBT-FREE. BUT IF YOU QUALIFY FOR A PERSONAL LOAN WITH A MUCH LOWER INTEREST RATE, YOU CAN PAY OFF THE DEBT FASTER AND SPEND LESS ON INTEREST.
- “ONE BAD REASON TO TAKE OUT A PERSONAL LOAN IS TO INVEST IN THE STOCK MARKET,” HE SAYS. “THERE IS NO REASON TO GO INTO DEBT JUST TO GET MONEY IN THE MARKET. SAVE AND THEN INVEST.”
- SOME OF THE WORST USES FOR PERSONAL LOANS ARE VACATIONS, WEDDINGS, ENGAGEMENT RINGS AND OTHER UNNECESSARY EXPENSES. IF YOU’RE HAVING TROUBLE SAVING FOR AN EXPENSE LIKE A WEDDING OR VACATION, DELAYING IT UNTIL YOU CAN PAY FOR IT IN CASH IS A BETTER OPTION THAN A PERSONAL LOAN.
- PERSONAL LOANS ARE ALSO NOT A GOOD IDEA FOR HOME REPAIRS. IT’S USUALLY BETTER TO USE THE EQUITY BUILT UP IN YOUR HOME, SINCE SECURED LOANS USUALLY HAVE LOWER INTEREST RATES.
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