Credit cards are great for quick and easy purchases that we can pay off in a timely manner, but what if you need a little extra time? Maybe you’re planning a family vacation, have a very long holiday shopping list or you’re going to be buying an engagement ring. For big purchases like these, putting that much on your credit card can be nerve wracking. The last thing any of us wants to deal with is the snowball effect that a late payment on your credit card can have. One option that may work more to your advantage is a personal loan.
Discover the benefits and most common reasons for obtaining a personal loan.
A personal loan is often taken out when homeowners are looking to either remodel or do repair work on their house. You can of course seek financing through a home improvement company or put it on a credit card, but often they can’t beat the low-rate that a personal loan offers. Plus, adding value to your home is never a bad idea when in the long run it can provide a great return on your investment.
Sometimes we don’t have the luxury of choosing between a personal loan or using a credit card for our next purchase. One of the main reasons for getting a personal loan isn’t about deciding a future purchase, but it’s for consolidating our current debt. A personal loan can be great relief if you have several cards to pay off or you spent more than you were expecting over the holidays.
We can often get in the habit of paying the minimum on our cards and soon become buried in debt that gets coupled with a very high interest rate. With a loan, you can get a lump sum to pay it all off quickly and in turn have a reasonable period to pay off what you owe with one easy payment.
Big vs. Really Big Purchase Items
It’s important to weigh out the pros and cons between a loan and your credit card for a purchase. For example, buying your kids the latest technology such as an Xbox or new laptop with a personal loan isn’t necessarily a bad idea but it doesn’t mean it’s the best option. Often when purchasing electronics like TVs and game consoles, if you use a credit card you can receive an extended warranty on the product. American Express for example often will add an additional year to the manufacturer’s warranty like with their Costco Card
because more often than not it seems something always breaks the week after the manufacturer’s warranty expires. GNCU’s MasterCard
extends the manufacturer’s warranty up to one full year. Also, most electronics can be covered by a paycheck or two and therefore taken care of in a reasonable time.
However, for some items we buy, such as an engagement ring or the wedding itself a little more time or even years might be needed. For truly big items like this, a personal loan is a great choice since payments are fixed and agreed upon upfront. You also won’t have to deal with the high interest that comes with a credit card.
Vacations are supposed to be relaxing but after you add up the hotel stay, airplane tickets, eating out, entertainment and everything else, it can be stressful to try and pay off. This is where a personal loan comes in. You can determine the budget necessary to have an enjoyable vacation then have an extended period of time to pay it off compared to a credit card.
Whether you are trying to pay off what has already been spent or planning for a large future purchase, a personal loan is a great option to consider. GNCU offers qualified members low-rate personal loans with flexible terms. Take a look at Greater Nevada’s easy application processes