Published: 03/10/2022

A Personal loan is a great idea

 Personal loan

Here are 5 Instances in 1Plus1 Guarantor Loans view why a Personal Loan may be a good idea:

Consolidate your Credit Cards

If you’ve several credit or store cards and you use them to the maximum applying for a personal loan to consolidate all your debts into one monthly payment may be an option.

Another reason to do this is to get a lower interest rate on the loan than the Annual Percentage Rate (APR) of your credit cards.

Refinance Other Types of Loans

As before, a personal loan could help you consolidate and refinance your debts and lower the cost of any type of credit. However, before applying for a personal loan to refinance another type of credit, analyse the advantages and disadvantages of your options, by comparing interest rates and choose the one that best suits your needs.

Finance a Purchase

Financing a purchase using a personal loan can be a good decision providing you know how to distinguish between a desire and a need. Once you know how much you need to acquire that product or service, make sure you consider several financing options before choosing one.

Often, it may be more convenient to apply for a personal loan to pay for a purchase than to acquire some type of financing directly from the seller or supplier. Never make a financing decision at the place where you are going to make the purchase, give yourself the opportunity to review more options so you can choose the one that is most competitive.

Paying a large expense

In any type of situation, expected or unexpected: a medical accident, a wedding, a vacation, a return to school, etc., a personal loan may be a good idea if you’re going to have to meet a large expense and need to have more than a month to pay it off.

This will save you having to pay high interest rates on your credit card whilst also keeping your credit history in good shape.

Improve Your Credit Score

Personal loans may improve your credit rating in three ways: First, it prevents you from having to default on your credit cards by giving you a more flexible financing option.

Second, it may lower your available credit utilisation ratio - the total amount of credit you have used against your total credit line. The smaller this ratio, the better your score will be because the personal loan increases the amount of credit you have available for your use.

Third, if your credit record shows predominantly credit cards, a personal loan could expand the range of financial services you have taken out and this could boost your credit rating.

In conclusion, a personal loan can be a very useful financial tool as long as you use it responsibly.

How do I apply for a loan with 1Plus1?

1Plus1 offer personal loans backed by a guarantor, subject to both the borrower and guarantor meeting our affordability and credit worthiness criteria.

If you think you may be interested in a 1Plus1 Loan, please give us a call on 0330 1200 313 and one of our friendly staff will be more than happy to discuss the process with you, or start your application here.