Five Worthy Causes for Taking Out a Personal Loan

[Jan 23, 2009.]

 

With unemployment topping seven percent, American consumers are not consuming as much as they once were. People are concerned about their future income. Just as banks are wary to lend, individuals are wary to borrow.

Nevertheless, there are valid instances in which taking out an unsecured personal loan makes sense, even in this uncertain economic environment. Here are five such situations:

1. Paying Off Credit Card Bills

Credit card companies charge high interest. When a loan comes along with a lower interest rate that can be used to pay off high interest credit cards, that's a real opportunity. If payments can be stretched out over a longer period of time, as well, the opportunity is even more compelling.

2. School

College remains incredibly expensive. It also remains helpful in pursuing a high-paying career. Many student loan institutions have gone under, leaving unsecured personal loans as one of the only options for some students. Although some soul-searching (and hard-headed evaluation) is always helpful, it's better to finish school if at all possible, even if it means going into debt to do it.

3. Medical Expenses

According to some studies, more than half of all U.S. bankruptcies are caused by medical bills. This is a sad statistic, no doubt. Knowing this, medical creditors are sometimes willing to take less than is owed in total if a lump sum can be paid immediately. If such a deal is available, and an unsecured personal loan can be obtained to pay said sum, it may be worth it. Certainly it's better than bankruptcy.

4. Urgent Home Repairs

Many homeowners have little to no equity in their homes. This means that the old standby when a home issue pops up--the home equity loan--is no longer on the table, for many people. But toilets still break, and a broken toilet can still ruin the quality of life for a home's inhabitants. A personal loan can get the toilet fixed, and help a home stay flowing smoothly.

5. Once In a Lifetime Event

Such as a funeral or, more happily, a wedding. A daughter only gets married once (hopefully), and though it need not be a lavish affair, it still costs money. If an unsecured personal loan on reasonable terms can be achieved, the smile on that daughter's face may render paying that loan back pure pleasure.

 

About Author:

Andrew Freiburghouse is a writer and businessman. He has worked as a magazine reporter, tax preparer, screenwriter, copywriter, and loan officer. He graduated from Santa Clara University in 1999 with a B.A. in English. Andrew was born and raised in the City of Los Angeles.