Don’t Rush To Get A Personal Loan

All of us have experienced this scenario:  You get in your vehicle and there is that insidious “Check Engine” light telling you for the past week that some costly expense is bound to happen soon.  Don’t you just hate that “Check Engine” light?  We all know it is there to help.  But, one can’t help but to feel like “That light has it in for me.  This is personal.”

Your First Impulse?

My first reaction in such cases is to feel irritation.  You can mentally see the domino effect: take vehicle to mechanic, get charged just to have the vehicle checked, have the car technician approach you with a grin and a repair estimate, and then you think “How much? Mercy!”.  But you need your vehicle and are compelled to have the vehicle checked and repaired.  At times the repairs can wait until you save some money saved and other times it needs to be taken care of ASAP.  Some of us will have the funds or the credit card to pay for the repairs, but, some of us won’t.

For those who don’t have the funds or the credit cards to pay for the repairs, the first impulse may be to get a Personal Loan instead of asking a friend or relative for help or getting a loan from your employer.  The reasons vary.  Maybe asking friend or relative for some financial help feels embarrassing.  However, there are good reasons for you to consider other options before getting into a debt.

Personal Loan Vs Family or Friend’s help or An Employer Loan

If no family or friend can offer some small financial help, a Personal Loan may be the way to go.  And to some of us, we just don’t want relatives or friends knowing our financial woes.  However, keep in mind that a Personal Loan will be a negative onto your monthly budget as most personal loans are paid in installments over several months.  Furthermore, you will be paying back, not only the amount borrowed, but also origination fees and interest among other fees.  This means less spending money for fun stuff.  Also, you would have to follow a somewhat rigid payment schedule with possibilities of getting late fees if not paid on time.  And the loan may be reported to your credit.

If you are lucky enough to be able to borrow some funds from family or friends or even an employer, you will still need to repay it.  Consider the benefits: the repayment arrangement may be easier on your budget; you will most likely not be charged a late fee if you are a little late on the payments; and if you are dealing with someone who likes you as a person, having to repay interest or other fees won’t be required.

The choice to get a Personal Loan or borrow from other sources is totally personal.  Both have the plus and minuses.  However, at a time when we see more people getting into more and more debt, we are hoping these few points will help some to make the best personal financial decisions.

As a side note, for those who are interested in ideas to improve their credit, you may want to visit this link for Top 20 Credit Repair Blogs,