Loans are an incredible tool that help many families strengthen their financial position, but they often have a negative association. The public narrative around loans often has to do with living beyond your means or carrying high levels of debt when in reality, that’s just one part of a much larger picture. In many cases, personal loans are a helpful solution that actually improve your financial situation and contribute to reducing debt by providing a convenient, low-interest borrowing option to individuals and families.
Here are three ways you can use a personal loan or line of credit to improve your financial health. If you have any questions or would like personalized financial advice, please contact Interior Savings Credit Union to speak to an advisor in your region.
Consolidate your debt
If you’re carrying a balance on one or more credit card or have used high interest ‘payday’ loans, consider consolidating these debts with one personal loan at a significantly lower interest rate. This is an excellent step toward eliminating personal debt and developing savings over time. You should also consider paying off overdue bills that may be negatively impacting your credit score while adding to your existing debt load. One personal loan with a great interest rate is a smart choice that offers convenience and peace of mind.
Make a large purchase with lower interest
Let’s say you want to go on vacation or get some new furniture for your home office, but your savings won’t cover the cost. Or, maybe you’re planning a wedding (or contributing to the cost of a child’s wedding) and need access to borrowed funds. It’s perfectly reasonable to use a personal loan to fund these expenses as long as you’re able to service that debt effectively. Look at it this way: a credit card may have an interest rate of around 20%, whereas a personal loan with Interior Savings Credit Union can have an interest rate as low as 3.95%. That’s a huge difference, especially if you’ve borrowed a significant amount.
Invest in your home — and your career
Many families put off home improvements or even basic home repairs because of the associated costs. While you shouldn’t necessarily be completing cosmetic updates that are way out of budget, there’s no shame in using a loan to pay for a new roof, furnace or refridgerator, for example. These are necessary investments in your home and your quality of life, and it makes far more sense to use a personal loan than to pay extremely high interest fees on an outstanding credit card balance.
The same logic applies if you’re a freelancer or contract worker who wants to invest in their career but sometimes needs capital to help float them between pay cheques. A personal loan may help you pay for that new laptop, skills training course or professional conference you have your eye on — all great investments in your career. We also have loans designed specifically for business and education — it’s worth seeing if you qualify.
Sometimes, a personal loan is exactly what you need to get on track and improve your financial health. To learn more about personal loans from Interior Savings Credit Union, please reach out to our team. We’d be happy to help. To book an appointment with a Financial Health Coach, click HERE.