Should You Take Out A Signature Loan To Cover An Emergency Expense?

12 May 2017
 Categories: Finance & Money, Blog

Emergencies are a fact of life. Sometimes your air conditioner breaks suddenly or a pipe bursts in your basement, and you're left with a bill you don't have the cash to cover. There are a number of ways to cover the bill, from putting it on a credit card to borrowing the funds from a friend. However, in many cases, taking out a signature loan (also known as a personal loan) is your best choice. Here's a look at some of the benefits of choosing a personal loan over your other options.

Personal loans are pretty easy to obtain.

Personal loans are one of the easiest types of loans to obtain -- easier than car loans, mortgages, and other common loans. Usually, banks approve or deny these loans quite quickly, so you can put in a few applications with a few different lenders, compare the rates they offer, and accept one of the loans within a few days' time. If you don't already have a credit card you can put the bill on, applying for one (and waiting to receive it in the mail) will take much longer than applying for a personal loan.

You won't risk ruining a relationship.

Borrowing money from a friend or family member is never quite as simple as it seems. If you make a late payment one month, this could harm your relationship with that friend. Plus, many people who borrow money from friends and family members feel like those friends are judging them whenever they spend money instead of putting it towards the loan. By borrowing from a bank, you're keeping things professional and avoiding potentially awkward situations with friends.

The rates tend to be pretty low.

Sure, your friend may offer you a great interest rate on a loan, but that comes with the downfalls discussed above. And credit cards tend to carry sky-high interest rates. Signature loans tend to come with much lower interest rates than credit cards, so you'll pay a lot less interest over the life of the loan.

You'll have your choice of lenders.

Personal loans are a common financial product. Everyone offers them, from small banks, to big commercial banks, to trade-specific credit unions. So if you have a preferred lender or prefer to work with a certain type of lender, you can keep your business with them.

To learn more about personal loans, talk to a lender like Las Vegas Finance in your area.