Six benefits of taking out a loan

Many of us need to borrow money at some time, so let’s take a look at six benefits of taking out a loan.

1. Freedom to spend

You may not know exactly what you want to spend the loan funds on, but perhaps you need a holiday, a new car, or simply want to consolidate other debts. Unlike specialised finance agreements for particular purchases, you can spend your loan amount as you choose.

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2. Improve your credit rating

Taking out a loan is a great way to improve your credit rating, which is essential if you plan to apply for a mortgage. Borrowing a small amount and proving you are reliable at making repayments looks good on your credit history. If you are not sure that you understand the terms of a loan, consult a specialist such as

3. An affordable option

Taking out a personal loan will usually be cheaper than maxing out a credit card; however, don’t take out a loan agreement with a company without checking that it is registered with the FCA.

4. Flexibility

Whether you need to borrow a large amount to cover home renovations or just enough to get your car back on the road, a personal loan offers flexible lending amounts to suit your circumstances.

5. Simple budgeting

Your loan will come with a fixed amount to repay each month and a set level of interest. This makes it easy to stay in control of your budget.

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  1. Get cash upfrontYour loan amount will be paid to you in a single instalment, which makes it ideal for covering the cost of a larger purchase such as a holiday or wedding. It can also be a convenient way to cover unexpected expenses, such as home repairs.

About the author

Lisa Alther

Lisa Alther is a farmer of words in the field of creativity. She is an experienced independent content writer with a demonstrated history of working in the writing and editing industry. She is a multi-niche content chef who loves cooking new things.

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