The financial impact of the COVID-19 crisis continues to increase. Millions have lost their jobs, and others have had to endure painful pay cuts. Coronavirus personal loans have enabled millions of people to get by during this difficult time. These small, low-cost loans come to the rescue when you have little to no income due to the crisis, and your stimulus check and unemployment compensation don’t provide enough to live on.
The crisis will pass eventually, but in the meantime, here are six ways you can use a personal loan to improve your financial situation:
1. Get a Student Loan
The economic effects of COVID-19 have compelled most students to find creative ways to build their college funds. With their savings depleted and parents out of work, many students have fewer financing options than before. Today, student loans remain one of the most attractive and viable financing solutions for these college students.
In most cases, limited scholarships and other financing resources leave learners with a significant savings account deficit and unmet needs. Personal student loans can supply the money needed to plug holes in your college fund. You can use it to pay outstanding tuition fees and meet extra expenses, including computers and living costs.
A student loan can give you the peace of mind to concentrate on your undergraduate studies. Because these loans were designed for students, they aren’t difficult to get, even with the current financial challenges.
To ensure the student loan offer is reasonable, review the terms and conditions with someone you trust before signing. Even if you have a not-so-good credit score due to your debt to income ratio, some credit unions may lend to you if you include a qualified cosigner in your application.
2. Get a Debt Consolidation Loan
Many people who were struggling to repay multiple loans before the current crisis hit are now completely overwhelmed by their debt. To make matters worse, as debts accumulate and interest rates increase, loans become even harder to manage. Debt consolidation is one of the most practical ways to avoid plunging into deeper financial trouble.
You can finance debt consolidation with a personal loan. This approach has many financial perks, including:
- Debt management enables you to combine your debts into a single payment. Many borrowers find it easier to follow a consolidated repayment plan. You may even shift multiple credit card debts to a single card with a lower interest rate, with a balance transfer option.
- Saves money. Outstanding unsecured debt attracts high-interest rates, which increases your current financial hardships. You can take a personal debt consolidation loan and move away from unsustainable interest rates. This move can save you a significant amount of cash in the long run.
- It can boost your credit score. Failure to pay off your debts hurts your creditworthiness. Debt consolidation enables you to make regular loan payments and keep your credit report attractive to prospective lenders.
3. Home Improvement Project
A personal loan comes in handy when you’re considering giving your home a facelift or needed repairs. However, even the smallest home improvement projects can involve large expenses. Instead of dismissing your home improvement project as an expensive pipedream, you can take out a personal loan to meet the renovation cost.
Because home improvement loans are unsecured, you don’t need to provide any collateral to qualify for one. If you’re unable to repay the loan, your property remains safely in your hands.
Many financial institutions are lenient with personal loan interest rates. If you’re short on cash right now, this financing option is ideal for you.
Whether you need $20,000 or $100,000 to transform your home dramatically, you can use a personal loan to pay for projects like kitchen remodeling or roof replacement. Building a backyard swimming pool, fresh landscaping, or repainting your house are also practical ideas that will improve your home’s look and increase its value.
4. Take a Holiday Loan
You can take out a personal loan to fund your next vacation. This option is fantastic for people desperate for a break who have little or nothing in your bank account. While a holiday loan is unsecured, a good credit score can pre-qualify you for it.
This type of loan has numerous advantages, including enabling you to spread your holiday costs over several months. You also get a fixed term with this type of lending, allowing you to budget for it.
5. Take Out a Shared Secured Loan
A shared secured loan is best when you need to make a purchase without spending your savings. Your lender uses the money in your bank account as collateral for the loan. You have to repay the loan before you can access the funds held as security.
A shared secured loan is a good option for boosting your personal finance status, especially when you have a bad credit score, because your lender is holding your savings and not worried over your ability to repay the debt.
Many online lenders, including credit unions, don’t have to charge high-interest rates on shared secured loans. They’re taking minimal risks with this type of lending. So, the loans are an inexpensive option for borrowers short on cash.
6. Take advantage of Skip-A-Payment
If financial challenges during the COVID-19 crisis prevent you from paying your personal loan payments, deferred payments may provide some relief. With most credit unions, this option is available as a Skip-A-Payment offer.
A short-term deferment plan lets you extend your loan term and take a break from your regular monthly payments. It’s an opportunity to work on improving your finances.
Taking a personal loan can provide the cash needed to improve your situation due to COVID-19-related financial difficulties. You can use it to pay for college, streamline debt management, fund a home improvement project, or pay for your next holiday. Personal loans are some of the most affordable forms of credit, including for borrowers without collateral.
At T&I Credit Union, we can give you the funds you need to finance unforeseen expenses or investments. Contact us to work out an affordable personal loan package.