Let’s face it, there are times when an online personal loan is necessary. Thanks to the success of fintech platforms, you have options today even if your credit score is not so great.
Applying for a personal loan from a P2P lender is much easier than from a bank. No office hours to deal with. No endless forms, multiple appointments, fees, or waiting endlessly for the answer. And, unless your credit is excellent, you most likely will not get a personal loan from a bank.
Taking out a loan should not be something done in haste. You still have to pay it back whether it’s a loan from the bank or a loan from an online P2P platform. However, even under the best of circumstances, meaning that you created a financial plan, you have a budget, you track your spending, you save, etc., you may find yourself in a situation where an online personal loan is going to be your best option.
When Should You Get an Online Personal Loan?
Credit Card Debt Consolidation
Credit card debt is the chief debt of American consumers today. This is a debt that will keep you stuck in the vortex of financial stress rather than enjoying financial freedom. In fact, according to the Federal Reserve, Americans have a total of more than $1 trillion of credit card debt! Research out of creditcards.com found that only 40% of Americans have the income to cover their credit card bills and can pay off the balance each month. This means that 60% cannot!
With interest rates as high as 20% or more, carrying a credit card balance means that you are giving credit card companies hundreds of dollars each year in interest payments. If you pay late, then your interest rate will be increased and you face fees and penalties. It’s a nightmare.
For those of you drowning in credit card debt, an online personal loan to consolidate your debt is the best way to start over. Your bills will be folded into one single loan, the payments will be automatic, your interest rates will be manageable, and your credit card consolidation loan from an online peer-to-peer lender will actually improve your credit score. You can turn a new page, start over and get back on track with your financial goals.
Medical debt is one of the leading causes of bankruptcy. Until recently, you could quickly find yourself dealing with debt collectors demanding payment. New regulations now give you more time to work out arrangements before the debt begins to destroy your credit score.
But there is still the problem of uncovered medical expenses, deemed “elective” by insurance carriers. In many cases, these procedures are critical to your mental and physical well-being. Procedures such as fertility treatments, laser vision correction, cosmetic surgeries, dental implants, and others are usually defined as “elective” and not covered by your insurance carrier.
Most people don’t have savings to cover the cost of “elective” procedures. In fact, many Americans skip even covered medical procedures and medications because they cannot afford the out-of-pocket costs.
An online personal loan to cover your medical expenses is a much better alternative to putting the charges on your credit card, especially if you are in the group we discussed above—the 60% who cannot afford to pay off the balance each month.
Sometimes the only way to reach your financial goals is to move out of town. Recent reports show a significant migration of citizens in pursuit of better salaries, lower housing costs, and a healthier lifestyle. But moving is expensive. You can minimize the costs, especially if you have friends or family to help you pack and move, etc. Chances are though that you will still find yourself short. Charging those expenses to your credit card only makes sense if you can pay off the entire balance once it arrives. If not, an online relocation loan is the only way to go.
Wedding season is not so far away. If you planned a winter wedding, then you are staring at the bill right now. Even if you prepared a cost-saving budget and saved for the wedding, you may still need a loan. Many vendors want to be paid in advance. If you don’t have all the money right now, an online personal loan is a perfect way to bridge the deficit. And once again, we cannot over-emphasize how much better this is than putting it on your credit cards and increasing your credit card debt. That kind of headache is the last thing you need when you are just starting out your new life as a couple.