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.
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 parachutelaw.co.uk/loan-agreement.
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.
- 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.
