Australians had $144.7 billion in personal loan debt as of October 2020. This is much less than the previous year, when personal loans stood at about $166.9 billion. Personal loan interest rates fell by around 2% between 2015 and 2020. The reason was that fewer people were applying for personal loans.
What does this mean for you? This rate drop may be your cue to apply for a personal loan at super low rates and improve your lifestyle. You may already have a few loans in progress, so why take another?
Why take another loan?
Such low rates appear once in a blue moon. The pandemic has put the personal loan market in crisis and forced banks to cut rates to attract customers. Some banks have interest rates that are less than or equal to the rates on your home loan.
So, you can apply for a loan and fulfill some dreams that you have been putting off due to shortage of finances. Some of the ways you can use the loan amount are:
Go for the vacation of your dreams:
Everyone has a dream vacation. It can be a single location or multiple locations. It could be an African safari, sailing on a luxury cruise ship or skiing in the snow-capped Swiss mountains. No matter where you can make this happen using the loan amount. So enjoy your vacation now and pay for it in months or years to come. You will create memories that will last a lifetime.
Upgrade your wheels:
You’ve been using the same car since college and it could use an upgrade for a number of reasons. This is where a personal loan comes in handy. You can replace your current vehicle with a new one or upgrade your existing car. Updates, when done correctly, can make your car feel like new.
Renew your home:
Home is where you come from at the end of the day. It is a place that gives you comfort and allows you to be yourself. So, if you’ve been putting off kitchen remodeling or other major renovations or repairs due to financial constraints, a personal loan might be just the thing for you.
These ultra-low interest rates will make your plans come true, and you can spruce up your home to make it more stylish, comfortable, and increase its value in the process. Your lifestyle will improve dramatically with such home improvements.
Consolidate your debt:
When you have multiple loans, you need to keep track of the different payments at another time of the month. It can be cumbersome and you can lose one which can hurt your credit score.
A simple but effective way to deal with this is to consolidate your loans into one so that there is one payment instead of several. Personal loans can be helpful in such situations. You can pay off all your loans of different terms, interest rates, and payments using a single loan, which is easier to track.
And what is more? You also save on interest on those high-interest loans, since personal loans almost always have lower interest rates by comparison.
Clean up your credit card bills:
Personal loans have interest rates well below credit card rates. Therefore, you can use them to pay off the outstanding balance on your credit cards. This payment improves your credit score and gives you more spending limits on your credit cards during the holidays. With so much debt out of your way, your lifestyle is sure to improve.
Less debt means less stress
When you have fewer loan payments, you have less stress. For example, your high-interest credit card payments are important, but paying off a low-interest loan may be less stressful. When managing your debt, you need to analyze and determine what debt you would prefer to have. Low interest loans are almost always the best option.
more flexibility
You can choose how long you need to repay your loan. The tenure of personal loans can vary from six months to five years. Therefore, you can choose the time that suits you best.
If you think you can pay off the loan in 6-8 months then save on the interest a longer tenure would attract, but if you can only afford small monthly payments then go for a longer tenure as it won’t eat into your monthly budget so much.
Improve your credit score
When you use a personal loan to pay off your debt, you dramatically improve your credit score. The advance payment is an indicator of how proficient you are in managing your finances, which will improve your credit rating. This will clear your way for larger loans, such as a home loan.
you are not paying too much
The higher interest rates go directly into the bank’s coffers. With a personal loan, you can cut your interest payments by more than half.
Average credit card interest rates range from 16-20%, but personal loans offer interest rates as low as 4.99%. The difference is significant. Imagine what you could do with the amount you save.
live a better life
When you can spend hands-free, you can live a better life. You can sign up for the memberships you’ve always wanted, eat at fancy restaurants, drink expensive wines, upgrade your lifestyle and add more excitement to your weekends.
You no longer need to be envious of your peers. Also, you can live the life you deserve. Paying it off is now even easier with such low interest rates.
Personal loans have gained popularity again due to their flexibility, attractive rates, paperless processing, virtual verification, and transparent approval system. You too can get a personal loan that will help you live a good life and not worry about adverse effects on your credit score.
The difference between the interest rates on your other debt and the personal loan is all you need to look at. You can do much more with your finances now than ever before. So stop lining someone else’s pockets when you could fill your own.
Categories: How to
Source: vtt.edu.vn