Australians had $144.7 billion in personal debt as of October 2020. This is much less than the previous year, when personal loans totaled around $166.9 billion. Personal loan interest rates fell by about 2% between 2015 and 2020. The reason was that fewer people applied for personal loans.
What does this mean for you? This rate drop may be your cue to apply for a personal loan at super low rates and improve your lifestyle. You may already have several current loans, so why take out another?
Why take another loan?
Such low rates come once in a blue moon. The pandemic has put the personal loan market in crisis and forced banks to lower rates to attract customers. Some banks have interest rates that are less than or equal to the rates on your home loan.
So, you can apply for a loan and fulfill some dreams that you have been putting off due to financial difficulties. Some of the ways you can use the loan amount are:
Go on the vacation of your dreams:
Everyone has a dream vacation. It can be a place or several places. It could be an African safari, sailing on a luxury cruise ship or skiing in the snow-capped Swiss mountains. Regardless of where you can achieve this using the loan amount. So enjoy your vacation now and pay for months or years to come. You will create memories that will last a lifetime.
Upgrade your wheels:
You’ve been using the same car since college, and it may need an upgrade for a variety of reasons. This is where a personal loan comes in handy. You can trade in your current vehicle for a new one or upgrade your existing car. Updates, when done correctly, can make your car look like new.
Renew your home:
Home is where you end up at the end of the day. It is a place that brings you comfort and allows you to be who you are. So, if you’ve been putting off kitchen remodeling or other major renovations or repairs due to financial constraints, a personal loan might be just the thing for you.
These ultra-low interest rates will make your plans come true, and you can spruce up your home to make it more stylish, more comfortable, and increase its value in the process. Your lifestyle will improve dramatically with such home improvements.
Consolidate your debt:
When you have multiple loans, you need to keep track of different payments at different times of the month. It can be cumbersome, and you may miss out on things that can hurt your credit score.
A simple but effective way to deal with this is to consolidate your loans into one so that there is one payment instead of multiple. Personal loans can be helpful in such situations. You can pay off all your loans with different terms, interest rates, and payments with a single loan, which is easier to control.
And what is more? You also save on interest on high-interest loans, since personal loans almost always have lower interest rates by comparison.
Pay off your credit card bills:
Personal loans have much lower interest rates than credit card rates. Therefore, you can use them to pay off your outstanding credit card debt. This payment improves your credit score and gives you higher spending limits on your credit cards during the holidays. With so much debt eliminated, your lifestyle is sure to change for the better.
Less debt means less stress
When you have fewer loan payments, you’re less stressed. For example, your high-interest credit card payments are high, but paying off a low-interest loan may be less stressful. When managing your debt, you need to analyze and determine what debt you would prefer to have. Low interest loans are almost always a better option.
more flexibility
You can choose how long you need to repay the loan. The duration of a personal loan can vary from six months to five years. Therefore, you can choose the time that suits you best.
If you think you can pay off the loan in 6-8 months, you’ll save on the interest a longer payment period would attract, but if you can only pay small monthly payments, choose a longer payment period, because it won’t eat as much out of your monthly budget .
Improve your credit score
When you use a personal loan to pay off debt, you dramatically improve your credit score. Paying early is an indicator of how adept you are at managing your finances, which will improve your creditworthiness. This will clear the way for larger loans, such as a home loan.
don’t pay too much
The highest interest rates go directly to the bank’s coffers. With a personal loan, you can cut your interest payments by more than half.
Average credit card interest rates are around 16-20%, but personal loans offer interest rates as high as 4.99%. The difference is significant. Imagine what you can do with the amount saved.
live a better life
When you can spend hands-free, you can live a better life. You can sign up for the memberships you’ve always wanted, eat at fancy restaurants, drink expensive wines, upgrade your lifestyle, and add more excitement to your weekends.
You no longer have to be envious of your peers. Also, you can live the life you deserve. Paying now is even easier with such low interest rates.
Personal loans have gained popularity again due to their flexibility, attractive rates, paperless processing, virtual verification, and transparent approval system. You too can get a personal loan that will help you live a good life and not worry about adverse effects on your credit score.
The difference between the interest rates on your other debt and the personal loan is all you need to look at. Now you can do much more with your finances than ever before. So stop lining other people’s pockets when you could fill your own.
Categories: How to
Source: HIS Education