The Many Reasons to Use A Personal Loan
There are so many reasons to use a Personal Loan. Let’s take an every day example of how someone could use a personal loan…
Let’s say you’re starting a home business. Yes, that can be exciting and terrifying at the same time. The goal is to be a raging success and completely self-sufficient. On the other hand, you have questions and fears about running a business. Isn’t it funny? When you have questions, sometimes answers disappear into the woodwork.
However, you found a home business you believe in. You know you can do this, because the product worked unbelievably well for you. Unfortunately, in order to try the product, you had to dip into the rent money to buy it. Now you need help paying rent. What other costs are involved in running a home business?
The Costs You Won’t Have
It would help you immeasurably if you had a clear idea of the costs involved in starting a home business. In many multi-level marketing companies, they’ll ship the product to your customers. You won’t need a permit or loans to help with rent in order to stock product. You won’t have to pay for shipping.
Since you’re working at home, you won’t have to pay overhead for office space. Right now you need emergency help with rent. When you get a personal loan, though, you’ll be set. You won’t have special office equipment, legal fees, payroll, or insurance to worry about.
That’s A Relief. What Costs Are Involved?
MLM companies give you a splash page, or an eye-catching page to grab people’s attention. It will make your product sound so exciting, people won’t hesitate to join up. It’s not, however, a website. Your splash page leads your customers to the company’s website, not yours.
So, if you want people to distinguish you apart from the company, then you’ll need a good website. What goes into it and how to set it up is a whole other article. For now, write down that you’ll need to pay for a website of your own. You might want a need a business loan to do it right.
The next thing you should write down is marketing. The MLM company will give you pictures and banners to publish in a number of places, but the bulk of the advertising will be up to you. There are several ways you can go about this, and some of them cost money. If you get loans to help with rent, then you’re good to go.
We should stop right here to something before we continue in our marketing discussion. Personal loans are called by many names. rent loans, a vacation loan, a medical loan and now you need a shopping loan for a computer, and dozens of other reasons are good enough to get a personal loan.
They could be listed using any kind of phraseology, but they’re personal loans. You simply choose the personal loan website you find online, fill out the forms, and you may have the money in your checking account usually by close of business that day. No muss, no fuss.
Since you used your rent money to buy product, you could use the personal loan for various reasons. The thing to do is tack onto the amount the money you’ll need for a website, advertising, and more. The amount is up to you, but now you’ll have a chance to get your home business going the right way.
Most people can’t distinguish marketing from advertising. Don’t worry, everyone does it. Marketing is researching your niche or the market you’re targeting. You need to know their age, buying habits, how they think and so forth. It’s become a science.
Advertising is getting your product out there in an eye-catching, attractive way with the goal of gaining customers. Fortunately, you know your niche. How might you reach them? Advertising is how to reach them.
Facebook is how most all businesses advertise. It reaches literally billions of people world-wide. You can target your niche as well as budget how much you want to spend daily. Start out with five dollars for one day. Spend more as money begins to come in. You could always take out a loan to pay rent in order to blanket Facebook with advertising.
Email marketing is another method business uses to advertise. Write up an email that will grab ’em. Surf the ‘Net for email marketing websites. There are dozens. Join up and use their email lists to get the word of your product out there.
This only costs money if you pay the yearly fee to reach thousands more on their email lists. Depending on the amount of your personal loan based on your other income, this could be a very lucrative idea.
Here’s where you should tack onto your loan a sufficient amount to pay for legal stuff. You’ll need a permit to conduct business from the county. Check into city and state permits, too. You’ll need to pay someone to extract taxes from your business. You’ll need credit card processing agents.
These are just the beginning. If you want to set up your own company and just use the MLM company’s products, it’s called drop shipping. You can carry just about anything you want. You can even use several companies’ products in your own company.
Establishing your own identity will be a key point for you, though, and that costs money. Whether you incorporate, become a sole proprietor, or just go on as a limited liability company or LLC, you’ll need legal advice. We don’t have to tell you how expensive lawyers are. It might take loans to help with rent just to pay the lawyer.
You might want to take out a personal loan for an attorney. No one expects it to happen to them, but customers do get in a suing mood sometimes. It might not happen often. Having someone there just in case, though, is a smart move.
Benefits Of Personal Loans
Now that you have an idea what a home business entails, let’s look into the benefits of personal loans.
By The Numbers
LendingTree tells us that personal loans – for another reason – were $125 billion industry last year. The personal loans industry has grown 269 percent in the past five years. When the growth rate of the personal loans industry has grown 25 percent in the past five years. The median loan amount is reported as being $17,000.
Fixed Payments Are Easy To Budget
A personal loan is taken out in a certain amount for perhaps 24 months to five years. The payments will never change like credit card payments do. Payments are due the same date every month, making accurate budgeting a snap.
About Interest Rates
Two things about interest rates to which to pay attention are the interest rate and that the interest rate is fixed. Credit card interest rates are high, and they don’t stop climbing. Some credit card interest rates are 19 percent or higher. They vary monthly, making your credit card payments different each and every month. Some personal loans, for instance, have been known to have a six to seven percent interest rate (for those with outstanding credit.)
Since a personal installment loan has a fixed payment every month, then the interest is the same every month. It won’t rise or fall. It’s for the life of the loan.
Auto loans are secured by the car, and mortgages are secured by the house. Personal loans aren’t secured by anything. The penalties for defaulting on a personal loan aren’t pretty, but you won’t lose your house or car for doing it.
Some personal loans are secured; don’t get us wrong. Lots of people put up their car as collateral, especially if their credit isn’t sterling. It really depends on your credit rating.
Higher Borrowing Ceiling
Credit cards have spending limits defined by the card holder’s credit, income to debt ratio, bankruptcies, and credit score to name a few. While personal loans use these same criteria and more to judge if a borrower will repay the loan, their ceiling is higher. Credit card limits may go up to $10,000 for super-creditworthy customers.
Personal loans go higher than that. Using the same criteria that credit cards do, personal loan lenders can and do go up as high as $25,000 to $30,000.
Your Reasons For The Loan
Credit cards limit people to the places they can be used. Retail, online or in stores, is generally the limit for credit card use. However, personal loans can be used for any reason at all such as loans to help with rent.
On the other hand, some retail vendors don’t take credit cards at all. They don’t want to pay the fees that come with credit card processing. Many retail vendors will give discounts to their customers that pay in cash as well. So credit cards aren’t always where it’s at.
Raise Credit Scores
Credit companies love it when people have varying degrees of credit. When you take out a personal loan, even if it’s for loans to help with rent, and pay it back on time, your credit looks much better. More and more stores and services will be willing to extend credit to you. And all this from a personal loan to pay rent.
Loans used to generate several pounds of paper that borrowers had to fill out. Today, it can be done online in minutes, with the money in your account in hours. One of the reasons for this is the proliferation of lenders, from lending clubs to peer-to-peer lenders to traditional lenders. Competition often streamlines things, and it’s happened with lenders.
Reasons You Might Get A Personal Loan
There are dozens of reasons to get a personal loan. When people need help paying rent, that’s about as scary as it gets. Goodness knows, we understand that. There are other reasons people get personal loans, though. Just in case you can’t think of any, we’ll help out.
Your niece has decided to get married on a Greek island. You have never been outside the continental U. S. and want to go very much. So you take out a personal loan to attend a destination wedding, get a passport, buy your wardrobe, and book the trip. Don’t forget a wedding present and an extra suitcase for bringing back cool stuff.
Moving locally isn’t too expensive, but moving a couple states away or across country is. You might need a way to pay for moving all the cars in addition to moving the house. You could need furnishings, window treatments, or minor upgrades to the house when you get there. An extra money might just be required until your first paycheck from the new job comes in. Yeah, you could use a personal loan for moving.
The washer and/or dryer won’t wash or dry. The microwave blew, and the computer got wiped out in a thunderstorm. Those appliances and computer are expensive. Do you have enough in the bank to cover it? You’ll need a personal loan. You can tell them it’s loans to help with rent, but what you spend it on is actually up to you.
Flowers, caskets (and in some states like Georgia, vaults,) burial plots, the funeral service and other charges add up to the tens of thousands. Some families will only have the best quality casket, the most expensive spray on the coffin, the best wreaths, and other such things. If this is the case, you might need a personal loan to bury a family member or loved one.
At some point in time, every family has a decision to make. They can upgrade the home they’re in and stay for a few years and downsize or move up as the case may be. Sometimes the “upgrades” consist of gutters, new roof, and possibly fixing a cracked foundation.
Other home remodels consist of adding gardens, water scapes, planting trees, putting up a fence, a swimming pool, or adding heat to the driveway and sidewalk. Sometimes a personal loan is about new siding on the house, new natural stone veneers on the house, new windows and doors, or a new deck.
Today’s technology is so amazing that a home remodel is now a difficult thing to do. You have to choose between several types and styles of flooring, lighting, counter tops, and appliances. Do you want molding? Do you want craftsman-style caps on the door frames? How about tray ceilings or solar panels?
The truth is that your dream upgrades are going to cost you both arms and an ankle. Go ahead and make your dreams come true; you have to live there. Why not make it incredible? Just make sure to borrow enough on a personal loan to make it happen.
One of the most popular reasons to get a personal loan is to consolidate debt. Many people roll their credit cards into their debt as well. What they end up with is one monthly payment. It never changes, and interest rates won’t go up. Debt gone, easy to handle monthly payment, no outrageous interest payments; what’s not to love?
Some people save up all their lives to take that dream cruise around the world, to the canals of Venice, to the Asian bazaars, or to the snow-capped Alps. Wherever your dream vacation is located, get a personal loan and go before life stops you. You’ve worked hard, and you deserve it! Could you bring us back a cool T-shirt? Just kidding. Get out there and have some fun!
Making your new home business work will take focus and dedication. You’ll need funds for permits, payment processing, website, and marketing. Some of the benefits of personal loans are better interest rates, set repayment schedule, and no collateral.
There are personal loan lenders and there are people who point you toward the personal loan lender best suited to your circumstances. These people work with you to find a lender who will work with you as well, matching their lending programs with your needs. They’re conveniently listed with personal lenders, so please talk with them today.
Myra has written in a range of styles encompassing white papers, finance blogs, credit product descriptions, how-to manage finance pieces, professional articles for lawyers, finance experts, web designers and more. She has written for an equally wide range of clients on the topics of loans, personal finance development, credit reports and scores, taxes and many more.
Myra worked in a bank as a young person and has dealt with payment processors in the past few years in her financial services endeavors. She therefore understands how the system works.