Anyone who tried borrowing money knows how hard it is to pay back at times. However, the act of borrowing money has become a bridge to most of us. With this, personal loans, take place.
Australians can choose from a variety of payment methods, but personal loans have always been the common one.
Personal loans are one of the fastest ways to get funds to use for variety of purposes. But, this method also comes with the capacity to repay the loan on time. Making a personal loan is also a commitment.
Aside from its easy way to avail funds, there is also a lot to enjoy about having a personal loan. This includes using a personal loan in purchasing items. Also, a personal loan is an major advantage since our usage of credit cards is reducing. That may not be the worst scenario as credit card interest rates are drastically increasing for about 20%.
However, some of the present-day options like the Afterpay may contribute potential risks that people may not be oriented of. A commissioner of the Australian Securities and Investments Commission (ASIC), Mr. Danielle Press, has alerted that “buy now pay later arrangements will cause some people to become financially overcommitted and liable to paying late fees.”
Apart from that, ASIC has also found one is every six users had a lot of delayed bill settlements or been obligated to lend additional money because of a buy now pay later scheme.
The reason? Most people say that these schemes are allowing them to spend more than they usually would.
With that said, we need to use personal loans in a way that will benefit us in the long run. The five common ways to utilise personal loans are listed below.
- Getting married on a budget
When you start planning your wedding, the budget becomes one of the most important factors. To help you with your wedding cost, many couples are now considering getting a personal loan. As per MoneySmart, Australians are averagely spending $36,200 just for the success of their wedding.
You can set either a monthly or bi-monthly for the repayment. With this, you can easily divide your money with all the expenses that a couple will face after the wedding.
- Get your Own Boat on the Go
If owning a boat is one of your dreams, you can potentially finance the purchase by getting a personal boat loan. Presently, there are about 2.6 million Aussie households who already have their own boat, this may be a cruiser or even a yacht.
The process of having a personal boat loan can provide a convenient method of financing the purchase. By the moment that you already decided the boat you like, you can sooner claim it just by starting the loan instead of organising a secured facility which can require inspections, valuations etc.
- Home Renovation or Emergencies
Falling short on funds to complete renovations to your home? A personal loan can be used to finance renovations quickly. Generally at lower interest rates to most credit cards, this can also be a cost competitive option.
If you’re renovating it’s always good to maintain a buffer, so be careful to not exhaust your savings and leave no emergency buffer.
- The Idea of Debt Consolidation
If you’re talking about debt consolidation, personal loans can indeed be the best way.
Personal loan rates are generally lesser than other sorts of debt, specifically credit card balances. This provides a chance to reserve interest charges, with a possibility to decrease your total monthly repayments and get more extra hard cash.
With that said, instead of falsifying multiple repayments, a personal loan means you only have a single easy-to-plan-for monthly payment.
- Say Yes to Adventure!
Whether you’re planning on trekking or beaching, either adventure is indeed a nice feeling to have.
If you think you can’t have an adventure because you don’t have the cash to go on enjoying your early years, think twice. You can now assist your travel budget with a personal loan.
With a planned personal loan balance, you can easily budget your dream adventure without the need to use high rate credit cards.