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Ways a Short -Term Personal Loan Can Help You

You can use a personal loan for virtually anything, from emergencies to debt consolidation to wedding expenses. A personal loan is a more affordable alternative compared to other financing options such as credit cards. Here are four beneficial ways you can use short-term loans.

Get Funds for Emergency

Get Funds for Emergency Expenses

A short-term personal loan can help you during emergencies. If you need to perform urgent repairs or fix your vehicle, a personal loan is a convenient short-term financing option.

The lender can approve your personal loan within 24 hours. The APR rate and the loan amount will depend on your creditworthiness.

Before applying for a short-term loan, compare personal loans rates from multiple lenders. Ideally, the rate should be below 36% APR.

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Personal Loans for Debt Consolidation

Debt consolidation is one of the leading reasons many people apply for a personal loan. According to the U.S. Federal Reserve, the total consumer debt hit $4 Trillion for the first time in 2019.

A personal loan can be a lifeline for people overwhelmed by credit card debts or student loans. Debt consolidation involves merging multiple debts into one debt with a single repayment plan. The lender can pay your creditors directly, as you pay the personal loan in smaller installments.

One advantage of consolidating your debts with a personal loan is lower rates. Since all your debts have been rolled into one account, you may have money to spare for the principal. Therefore, it enables you to pay your debts faster than other types of financing.

However, you may need a high credit score to get a loan at a lower rate. If your credit score is too low, debt consolidation is not always the best option. You may also want to compare personal loan rates on an online marketplace such as Lantern by Sofi. According to the experts at Lantern by SoFi, “It’s a good idea to compare personal loan rates from different lenders to find the best deal. If you do not see the rate you want, try lowering the amount you want to borrow or improving your credit score.”

Finance Remodeling Projects and Appliance Purchases

According to a survey by Bankrate, 11% of homeowners said they plan to use their loan for home renovations. House remodeling projects can be expensive, requiring thousands of dollars in one payment.

It is easier for most homeowners to make monthly payments rather than spend $10,000 on a bathroom renovation. You can also use a personal loan to purchase a new fridge or replace your existing HVAC system.

Wedding and Vacation Expenses

Wedding events can incur unexpected expenses that quickly add up as you approach the wedding day. Personal loans are often a more accessible option for emergency expenses compared to a pay-day loan.

You can get between $2000 and $40,000 depending on the lender. Most personal loans are unsecured, meaning they don't require collateral. If you need money urgently for vacation expenses, the lender can approve your personal loan on the same day.

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You can use personal loans for emergencies or meet your short-term financial obligations. But you should make sure you can fulfill the repayments on time. Also, check if the lender allows you to make early payments. Before applying for financing, ensure you compare personal loan rates from multiple lenders using an online tool like Lantern by Sofi.

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