Personal Loans in Ohio 2024

5 of the Best Reasons to Get a Personal Loan

Personal loans are the lifeblood of many small businesses and families, bringing them through tough times and providing investment capital for new ventures. If you have never explored the opportunities of a personal loan, here are 5 of the best reasons that it may be the missing piece that takes your life to the next level.

Starting a Business

You may look at the prospect of owning your own business as out of reach until you find out that some of the biggest celebrities in the world actually used a personal loan to start theirs. Even as the most requested Sports Illustrated swimsuit model of the decade, Kathy Ireland used a $50,000 personal loan to start her licensing business, which is now a $2 billion global phenomenon. If A-list celebrities make use of personal loans, then you should have no problem utilizing it as well.

Medical Emergencies

No one ever goes into the day thinking they will be involved in a medical emergency - this is why they are usually called "accidents." For those of us who are less prepared than others for these unfortunate accidents, a personal loan may be the saving grace that you need. There is no need to go bankrupt just because you hit a bit of trouble. Give yourself the cushion that you need before the creditors start knocking.

Short Term Floats

The number of microbusinesses (defined as a business with less than 5 employees) are increasing across the board as people rely less on corporate jobs and more on an entrepreneurial spirit. In many cases, a personal loan can be used to float payroll to employees during a bad month or sales quarter. Why let a single hiccup destroy a business when a personal loan can take that business into the holiday season and a return to profitability? A personal loan can also be used to make payments on a critical piece of hardware, a business consultant or security upgrade.

Investment Capital

You may have encountered an opportunity to make a great deal of money, but you did not have the funds on hand to take advantage at that time. Sadly, most investments are based at least partially in timely movement, and if you cannot move when you see the opportunity, then you lose out on it completely. A personal loan means that you have the capital that you need to move as soon as you see something that is worth your time. Because you know the interest rate of repayment, you can also calculate a benchmark for a profitable investment instead of moving solely off of hearsay and hope.

Funding for an Education

There are few investments that pay off more than a continuing education. If you are looking to return to school but you do not have the money, a personal loan can give you the leverage that you need to take advantage of an industry opportunity. Just like any other investment, education is something that has a limited window, and the earlier that you begin your training, the sooner that you can begin to profit from it.

Although there are many other reasons that a personal loan can be useful, it isn't hard to find yourself in one of the above categories. If you have not considered a personal loan as one of your main financial tools, it may be time to expand your horizons. The first lesson of money is that timeliness is key. When you need money right now, a personal loan is usually the best way to go. Get the best rates by comparing home equity loan rates on a rate table to find the right lender - make sure that you are using technology to your advantage!

Should I Get a Personal Loan to Pay off Credit Card Debt

They arrive every month, unassuming white envelopes packed with statements detailing just how much of your hard-earned cash you’ll need to part with. Credit card bills can rapidly overwhelm your budget and your financial well-being. In most cases, paying off those credit cards with a personal loan allows you to consolidate them and save money every month and over the life of the loan by paying less interest over time.

If you currently carry high balances or are close to your limits, then paying off those cards can also result in an improved credit score; ideal if you are planning on applying for a mortgage or auto loan in the future. Learning more about the pros and cons of paying off your credit cards with a personal loan can help you make an informed decision; here’s what to think about as you decide:

The Upside of Paying Credit Cards off With a Personal Loan

There are several good things that happen when you pay off your credit cards instantly with a personal loan. You'll only be responsible for a single payment each month and spend less time working on your bills. You'll also save money over the life of your loan, particularly if you have only been paying the minimums on your cards; you could even see a boost to your FICO score if your utilization was high.

Simplify your Life and Budget

Paying off your credit card debt also simplifies your budget; you won’t have to worry about remembering to pay multiple bills each month, just the single loan payment. In most cases, that loan payment will end up being lower than your monthly minimums; you’ll likely end up with a little more money in your budget.

Save Money

In the long term, paying off your credit cards with a personal loan can save you money. Credit card interest rates can be as high as 29% or more, with only small amounts of your payments going towards your actual balance each month. By paying off these balances, you can transfer your high interest debt to a lower interest loan and end up spending less money over time.

Improve your Credit Score

Since you’re eliminating some credit card balances, you’ll be improving your overall utilization rate. Credit reporting agencies love to see a low utilization rate on your cards; if you have been close to or over your limit on one or more cards, then the improved utilization could benefit your FICO score. You won't get a huge boost, but even a few points can make a big difference when you apply for a mortgage or other big loan.

Potential Problems from Paying Off Credit Card Debt with a Personal Loan

While the potential upside of a better credit score, lower costs and a simpler budget are all good reasons to pay off your credit card balances with a loan, there is a potential issue looming. Willpower – do you have the strength to avoid running up those balances again?

A wallet full of credit cards with zero balances may just be too tempting for some. If after paying off your balances, you resume your original spending habits, you could end up owing twice as much. You’ll still be responsible for the personal loan, but have to deal with a fresh batch of credit card bills as well.

The Bottom Line

If you commit to being responsible with your credit cards and understand the problem that running your balances back up would cause, you could benefit from paying off your revolving debts with a personal loan.  The lower interest rates, comfortable payments and simplicity of a loan should improve your overall financial health and allow you to make the best possible choices going forward.