People take out personal and payday loans for a variety of reasons. Some are using it to pay for their monthly rent, to purchase expensive gadgets, or to finance their vacations.
If you want to get the most out of the money that you loaned, then you came to the right place. In this article, we will discuss some of the best ways that you can use loan money. Without further ado, let’s start:
- Repayment of other smaller loans
If you are concerned about missing a payment of several minor loans, it is advisable to have a major loan and pay off all other loans. This way, you will only have to worry about a single big loan, as opposed to dealing with multiple lenders. Moving a lot of small loans in a big loan will save you a lot of trouble and worry. This process is also known as loan consolidation.
Getting loans for repayment can also save you money. In case you are entitled to a personal loan with an interest rate that is lowered compared to what you are paying for an existing loan, we recommend you to take out that personal loan to settle your existing loan. To illustrate, imagine that you have a $10,000 outstanding loan with 20% interest. You are entitled to a personal loan on the same amount, but with only 12% interest. What you do is apply for the personal loan and use it to pay your outstanding loan, and you will save 8% interest on your outstanding loan.
- More capital for your business
Taking out a loan to bring up capital in your business is a really practical thing to do. This is because a loan is a much better way to obtain capital for a lucrative business compared to using share capital. When you issue share capital, you are losing more control of your business to the shareholders, so taking out a loan instead is better if you want to maintain your level of control. You will have an excess of RoR (rate of return) on the interest rate of the loan. Being an entrepreneur, you shouldn’t be frightened of acquiring loans since they can boost the range of your business simply by assisting in growth.
- Money for new opportunities
Sometimes, you will run into great opportunities only to be hindered by the fact that you don’t have enough money to invest in it. Maybe, you found a good real estate property in an emerging market. Or maybe, you want to invest in a new start-up company that is gaining enough traction. If money is the factor causing you to miss out on great opportunities, it is recommended that you take out a loan in order to finance them. It can be risky to invest money that came from a loan, so do not invest unless you are completely certain that the venture you are investing in is profitable.
- Purchase of new equipment or upgrades for your work
It is possible to improve your efficiency by upgrading your worn-out tools and equipment to better models. This is especially true if you are working as a carpenter, plumber, electrician, or any other profession that requires specialized tools. Replacing your old tools with new ones will increase your productivity, so taking out a loan for it is worth it.
- Improve your credit rating
Even though this is not guaranteed to work, you are able to potentially improve your credit score by taking out a personal or payday loan. This works due to mixing the amount of credit on your name. Your credit score is evaluated based on the “mixture” of the credit accounts that you have. You will have a better credit score if you have a variety of loan types, such as credit card, mortgage, student loan, and installment loans. If you currently do not have any kind of installment loans on your name, taking out a personal loan to fill that gap may increase your credit score.
- Home renovations and upgrades
This is somewhat in a gray area, especially if you are only doing the home improvement to have a nice home. However, if you are renovating and upgrading your home with the purpose of increasing the market value of your house, then borrowing money for it is rationalized.
There are two main advantages of having an increased market value. First, you will be able to sell your house and switch to a place that is less expensive, leaving you with a substantial income. Next, you can also put a mortgage against the price of your property in order to borrow money.
Using a personal loan will allow you to have savings on interest, which is low compared to interests on credit cards. In case you are using another mortgage to fully make the most out of the reduced rates of interest, you may be in a position to deduct a percentage of the interest rate. However, your home will be taken as collateral in case you failed to pay.
- Emergency payments
If you do not have sufficient emergency money for an unexpected emergency situation, taking out a personal loan to pay for it is recommended so that you will have enough money to cover for the expenses. You can also take out a payday loan if the emergency situation requires you to quickly pay your dues. Preferably, establishing an emergency money fund will minimize the need of having to take out a loan, however sometimes there are emergencies that you cannot prepare for.
If you are interested in applying for a Personal and Quick Cash Loan Singapore, we recommend you to check out GM Creditz. It is a licensed money lender in Singapore that provides personal, payday and foreign loans, as well as other financial products. You can apply to their loans on their website, or you can visit their office at 111, #01-41 North Bridge Rd, Peninsula Plaza.