Life likes to throw us a curveball every now and again. If you’re dealing with money challenges, you’re not alone. Many people find themselves in need of extra cash, whether it’s to cover unexpected expenses or to start that new business venture. But before you turn to high-interest credit cards, it’s worth considering a personal loan.
In this guide, we’ll tackle common personal loans myths, and show you why they could be a smart choice for your financial needs. Read on to discover how a personal loan with Smart Money could be the solution you need to take control of your finances.
Myth no 1: Personal loans are only for people with good credit.
Fact: Everyone deserves a fair chance to achieve their financial goals.
One common misconception people have about personal loans is that they’re only for those with good credit. It’s true that having good credit can make it more straightforward to get your personal loan application approved. If your credit is less-than-perfect, taking steps to learn more about your own finances and develop healthy financial habits may take time and effort. But in the long run, it can pay off. You can help lenders understand that your circumstances have changed, and also learn the skills you need to make informed financial decisions and achieve financial stability.
Myth no 2: You can only use personal loans for emergencies.
Fact: At Smart Money, we provide a variety of personal loan options to fit your needs, whatever they may be.
While personal loans can be helpful in emergencies, they can also be used for a wide range of purposes, such as home improvements, travel, debt consolidation or other major expenses. Why not come and discuss your financial goals with us? We may be able to help.
Myth no 3: Personal loans are always unsecured.
Fact: Smart Money offers both secured and unsecured personal loan options to fit your specific needs.
Many people assume that personal loans are always unsecured – which means they don’t require collateral. Unsecured personal loans may be more widely available, but some lenders offer secured personal loans, which require collateral, such as a car, home or other valuable assets. People who are looking for a larger amount of money or have a lower credit score may think about taking out a secured personal loan, but it’s important to carefully consider the pros and cons of secured personal loans before making a decision. Securing a loan with collateral means you risk losing the collateral if you can’t pay back the loan.
Myth no 4: Personal loans always have high interest rates
Fact: Understanding how interest rates work can help you make the best informed decision for you.
While interest rates can vary depending on your credit score and other factors, personal loans can typically have lower interest rates than credit cards. Our team at Smart Money can work with you to help you understand how interest rates can impact your finances, and what to look for when choosing a personal loan.
Myth no 5: Personal loans are always a good idea.
Fact: It’s smart to consider all the options.
Like any type of loan, personal loans have both pros and cons. Some advantages of personal loans include fixed interest rates, predictable monthly payments and the ability to use the fund for a variety of purposes. On the flip side, personal loans can have higher interest rates than some other types of loans (for example, car finance may offer a lower rate as the vehicle is used as security) and taking out a personal loan may not be the best choice for everyone.
So how can you decide whether a personal loan is the right choice for your financial situation? Smart Money’s Free Financial Health Check service helps you to consider factors like your credit score, income and monthly spending. We’re here to help you explore all your options and make an informed decision about your financial future.
Let Smart Money be your guide to learning how to be smarter about your money. Contact us today and start taking control of your finances with confidence.