The Advantages of Applying for Tailored Personal Loans

Sharing is caring!

A loan is perfect for you if you need extra budget for important purchases. Consider using a credit card for regular spending or obtaining a mortgage to buy your first house. If you’re responsible, carrying debt could help you achieve your financial objectives—intentionally using loan proceeds and planning to repay it.


Another type of debt that, with carefulness, might be useful is personal loans. Personal loans have several advantages, whether you’re seeking secured or unsecured loans. Here are the advantages:

1. Build Credit

Consistent monthly payments toward the owed debt require taking out a personal loan. Lenders normally report your payment history to Equifax, Experian, and TransUnion, the three major credit bureaus.


Making timely payments regularly will assist in raising your credit score since the payment history makes up 35% of your FICO credit score. As a result, it will be more difficult for you to obtain credit in the future if you make late payments or default.

2. Lower Rates

As opposed to credit cards, personal loans typically have lower interest rates. Personal loan rates for borrowers with decent credit ratings start at about 5%. Even people with fair credit scores might not be subject to double-digit interest rates.


Compare personal loan rates with credit card rates, which are frequently substantially higher. The interest builds up if you have a balance on your credit cards.

3. Make Debt Consolidation Simple

By paying off multiple loans and credit card balances with a single personal loan, debt consolidation loans enable consumers to organize their finances. Not only does this lessen the number of payments you must remember each month, but if your credit score has increased since you took out your previous loans. It can also result in a cheaper total interest rate.


Some lenders specializing in debt consolidation may pay off your other bills for you directly rather than depositing money into your account.

4. Substitute for Payday Loans

A personal loan could help you avoid paying hundreds of dollars in interest if you need money for an emergency. Depending on your state, a payday loan’s typical annual percentage rate (APR) may exceed 600 percent. A personal loan’s maximum interest rate is normally around 33%.


Payday loans offer brief repayment periods, usually two to four weeks by your next paycheck. Due to this rapid turnaround time, it is frequently challenging for borrowers to repay the loan before the deadline. Instead, borrowers are frequently compelled to renew the loan, which results in the accrued interest being added to the original principle. This raises the overall amount of interest owed.

5. Set Adaptable Borrowing Limits

Although borrowing amounts vary depending on the lender, personal loans typically range from $1,000 to $100,000. Personal loans can be customized to fit the borrowing requirements of most consumers.


Securing a personal loan for $100,000 will probably be more difficult than getting approved for a lesser, less hazardous amount. Alternatively, a credit card or point-of-sale financing may be better for financing a smaller purchase.

6. Predictability

Personal loans have set repayment terms because they are installment loans. As a result, you will be aware of how long you will have to make payments. Your interest won’t change during the duration of your loan with personal loans. This allows you to know how much it costs each month.

7. Ease of Application

Comparatively speaking, applying for a personal loan is easier than applying for a mortgage, home equity loan, or home equity line of credit. Additionally, many internet lenders for personal loans use an entirely online application process.  If you’re prepared to begin your path to better and smarter financial management, apply for a tailored personal loan!

8. Flexible Terms for Repayment

Although the repayment schedule for personal loans is predetermined, you have some flexibility there. While some lenders only provide a few different repayment options, others offer repayment durations ranging from 12 to 84 months.


Some lenders of personal loans even provide significantly longer repayment terms. For instance, LightStream enables qualified borrowers to spread out their loan repayment over 144 months.

9. One Lump Sum

Lenders give out personal loans as an upfront lump payment that can be used to fund purchases or pay down debt. With no need to put money aside in advance, borrowers can make substantial purchases and pay for them over time. While using loans to make necessary purchases can be a smart move, doing so could be risky if you use them to finance vacations or other luxuries.

Get a Tailor-made Personal Loan Today

A personal loan is not something you should take lightly. Before you apply, see if there are any workable alternatives, such as delaying making that expensive purchase until you have more money.