When might you need a personal loan?

As summer looms, the household bills seem to increase, don’t they?  The spring sunlight has a way of showing up gaps in your roof tiles and the desperate state of your home’s exterior paint.

Once there’s a chance of less rainfall, garden projects are renewed.  Further down our street, someone is having a large shed installed surrounded by an extensive patio.  To the rear of our house, the groaning of a hedge cutter has been heard for several hours.

If it’s not sprucing up the old homestead with something like a kitchen renovation, it’s repairing equipment that has gone on the fritz like the boiler (a decent new one costs in the thousands), or things which no longer work in the car.  The air conditioning in my beloved Skoda has gone kaput and now blows hot, instead of cold air.

I wrote last week about the additional costs of education – whether that be replacing school shoes or shelling out for school trips.

And, not forgetting upcoming holidays.  If like us, you’re a fan of self-catering, it’s easy to pay the deposit at the point of booking and less easy to remember exactly when you have to pay the balance.  It is, to be fair, usually around 6 weeks before your holiday but boy, does it come around quick.

Other reasons you might need funds quickly include:

  • Consolidating or refinancing high-interest debt
  • Making a large purchase like a washing machine or laptop
  • Financing a small business purchase or expansion
  • Paying for a medical procedure or expense
  • Paying for a wedding or engagement ring

If you’re not much of a budgeter, you may occasionally find yourself strapped for cash and, whilst dipping into your savings is the most sensible way to avoid getting into debt, that is not always possible.

Many of us do not save or if we do have funds tied up in ISAs or pension pots which we would be loathed to touch.

A personal loan, then, is often a practical solution to getting your hands on much-needed cash, as long as you are sensible about it.

In addition, this may make more sense than loading any extra expense on your credit cards which are likely to have a higher interest rate which will quickly rack up your debt, even if you are meeting the minimum monthly repayment.

Make sure you research loans online to make sure that you are getting the best deal in terms of the interest rate you will have to pay on the loan sum and the time you’ll have to pay it back.

The longer the term of the loan, the greater the overall amount you’ll have to pay back will be.

Other ways to raise the cash include lending from the “Bank of Mum & Dad” or a relative but be sure to write down all the terms of your agreement and how much you will pay back and when.  Relationships can quickly sour when it comes to money!

You could also see if there is any treasure in your trash and finally clear out the garage.  You can list items to sell on eBay and Gumtree but be aware of sellers’ fees and other transactional costs, for example, the fee to receive money from Paypal.

The Husband and I have a ‘slush fund ISA’ where we put windfalls and bonuses to fund our household bills but that wouldn’t cover, say putting in a wetroom should one of our elderly parents come to stay.

Since we are both in our 50s I’d prefer to take out a personal loan rather than add any more to our mortgage.

And if we finally get around to having a honeymoon (8 years and counting), I’m hoping it will be to a destination a little further afield than our beloved Devon – which wouldn’t be covered by our existing savings.

Whatever the reason you need to get your hands on some extra cash, make sure you look at all the options, write everything down and make sure you file away any emails and documentation in one place.

With some sensible management and plenty of research, a personal loan may stack up as the best option for lower to middle-range expenses.

The only other option is the one often quoted by my mum.  “Well you’ll just have to do without, won’t you”?  Bless.


1 Comment

  1. Peter Watson
    20 March, 2019 / 9:37 pm

    Fortunately,my wife and I are members of a credit union and obtained a loan through them to replace our old boiler.

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