A personal loan offers a fast, pain-free way to secure money. Like any loan, though, you’re required to pay it back according to the lender’s terms. Therefore, it’s important to use a personal loan to cover the right expenses. Rather than wasting it on a week-long vacation, consider the five following ways to make more money with a personal loan.
#1) Car Repairs
If your car breaks down and you are unable to fix it, how will you get to work? Unless you have access to public transportation, you may struggle to commute. You can cover the cost of unexpected repairs, however, with a personal loan. Whether it’s a basic engine tuneup or a head gasket replacement, a personal loan will keep your car running so that you can commute and make money.
#2) Fund Your Small Business
Many entrepreneurs use a personal loan to fund their small business. If you have the perfect idea for a profitable business and want to make it a reality, consider a personal loan. According to the Small Business Administration (SBA), home-based small businesses require an average of just $2,000 to $5,000 to start. This is well within the limit of a personal loan. Once you’ve secured a loan, you can purchase inventory, equipment, advertising services and more.
#3) Go Back to School
Statistics show that college graduates earn roughly $1 million more throughout their life than workers who didn’t attend or graduate from college. Using a personal loan, you can go back to school to pursue your desired career and make more money. Lending for personal loans have few restrictions, meaning you can use them for just about anything, including school tuition, books or other education-related expenses.
#4) Consolidate Credit Cards
Another financially smart way to use a personal loan is to consolidate credit card debt. The average U.S. household has about $16,000 in credit card debt. While interest rates vary, some credit cards have a higher rate than personal loans. Assuming this is true for your debt, you can save money by consolidating your credit cards with a personal loan. After obtaining a loan, use that money to pay off or pay down your credit cards with the highest interest rate.
#5) Transition to a New Job
Changing jobs can open the doors to new, higher-paying opportunities. Unfortunately, the transition between your old job and new job may leave you without income for a brief period of time. The good news is that you can use a loan to cover your personal expenses during a job transition. Whether it’s your rent, car payment, utilities or a uniform for your new job, a personal loan is the perfect financial bridge during a period of unemployment.
These are just a few ways that a personal loan can make you more money. The truth is that there are dozens of other ways that a loan can improve your finances. Just remember to choose a personal loan from a reputable, trusted lender.