Taking out a loan can be a big decision. Whether you’re sharing a property with a partner or living alone, borrowing money can impact your life in big ways, and it’s not something you should take lightly. There are plenty of reputable loan companies out there, like Everyday Loans or similar, which make the process of applying for and receiving your loan as painless as possible.
Still, though, you should be absolutely certain that a loan is what you want. Here are 10 occasions when taking out a loan makes sense.
If you find yourself with a number of debts from disparate places, each of which needs to be repaid soon, then taking out a loan makes perfect sense. By paying off all of those debts with your loan, you’re effectively combining all of your payments into one, making sure that you’re not sending money out every which way and also making prompt repayments much more likely. If you’re struggling with debts from all directions, consider taking out a loan; it’s much easier to keep track of one single payment per month than five or six, for example.
In this day and age, weddings are expensive, especially if you or your spouse has a dream wedding that you’d like to put together. The average UK wedding now costs over £30,000, which is an awful lot of money to come up with at once. Taking out a loan is a great idea if you need to cover the costs of your wedding; you might need to repay it afterwards, but you can’t put a price on the most special day of your life, right? Everything from the venue to the photographer needs to be paid for, so taking out a loan will reduce the hit on your wallet.
If you’re living in the UK and you’re lucky enough to be able to take advantage of the NHS, this might not apply to you as much. Still, there are plenty of medical procedures for which you might still need to pay in the UK, and in many other places around the world health care can be costly. Although dental work is available on the NHS, many of the procedures are still quite costly, and cosmetic surgery (for example) can’t be done on the NHS. As such, you might find costs quickly mounting, for which a loan is the perfect remedy.
Similar to wedding planning, but this one can involve the whole family. Do you, your spouse or your kids have somewhere you’ve always wanted to go? Been trying to squirrel away money for that dream trip since time immemorial, but just haven’t managed to get enough? Taking out a loan for a holiday is a great idea, especially if it’s a more costly venture you’re invested in like a cruise, an extended stay or a round-the-world trip.
Financing a vehicle
Your commute to work is getting you down. So, so down. It’s tiring to take three buses every day, or to pile on to a crowded train and jostle for a seat each morning. You’re looking at buying a car, but you can’t quite stretch to it. Take out a loan and spare yourself the pain of sitting next to strangers each day, hearing their music filtered through headphones and wishing you were anywhere else.
Although the amount you might need to borrow for this is a little smaller, there are still plenty of expenses associated with moving house. You’ll need to pay movers, buy new furniture for the new place (assuming you’re not simply moving the old furniture) and more. You’d be surprised how expensive moving house can get. Alleviate some of the costs by taking out a loan.
Okay, so you’ve just moved into your dream home. There’s something not quite right, though - something it needs before it can truly be called complete. A conservatory, perhaps, or a shed in the garden. If you’re looking to carry this project out yourself, you’ll need materials, and materials cost money. Taking out a loan is a great way to knock out some or all of the cost of a home improvement project.
Credit card debt
Loans frequently have lower interest rates than credit cards, so taking out a loan to pay off a credit card is a smart move. You’ll be transferring the balance of your old debt across to your new loan, where you’re not paying anywhere near as much on interest. This means you’ll pay it off quicker in the long run, and - if your loan is slightly more than your card debt - gives you a little extra cash to play with in the short term.
We never know when something might happen to our loved ones. Perhaps an elderly relative suddenly passes away, or a car accident totals your beloved car. If this happens, you’ll need to get your hands on some money quick, and a loan is a great way to do that. Family emergencies are already emotionally distressing, so don’t let your finances suffer.
Credit score improvement
It sounds counterintuitive, but taking out a loan can significantly improve your credit score. If companies see that you’re able to make regular repayments, then you’ll look better in the future when you’re applying for other loans or credit cards. If you’ve never had a loan, applying for one will actually boost your score, as having a loan on record is better than the uncertainty of not knowing for most companies.