Today, in the wake of the COVID-19 pandemic, many businesses are having a difficult time staying open while meeting their financial obligations. Many individuals have lost their jobs and have fallen into debt due to loss of income. No matter what the reason, many individuals need an extra injection of cash to pay their bills and keep their families afloat.
While the pandemic stimulus checks helped many get by, those checks are long gone, so where do people go from here?
As COVID-19 Restrictions Decline, Costs Go Up
Across the country, we are seeing the cost of everyday necessities go up. Everything from groceries, to clothes, from housing to the exorbitant price of gas, it is more expensive to live in 2022 than it was to live in 2020.
According to BuddyLoan.com, 77% of the population relies on personal loans to help meet their financial needs. 2021, saw more first-time borrowers taking out loans to help pay for everyday needs:
- To pay for car repairs or help with a down payment on a vehicle
- To purchase appliances
- Pay credit card bills
- Pay reoccurring monthly bills
- Cover medical expenses
- Cover medical expenses
- Meet other daily financial burdens
- Buy groceries
Personal Loans Helping to Reduce Debt
Most people don’t enjoy increasing their debt; most try to reduce their debt. In difficult times, often there is no other option than to look for a lender that will give them a loan.
There are many things to consider when taking out a loan. According to MoneyJourneyToday.com, before considering taking out a personal loan, consider the following:
- Make sure that you meet the financial requirements to secure the loan. Be ready to have information available like social security information, W2’s or 1099 forms from the previous tax year, and other financial information as indicated by the lender
- Double-check your credit score and credit history. If you have bad credit, you may have a difficult time securing a loan. Before applying, make sure you are up to date on all credit card debt and all other existing loans are paid off or at least on time.
- Know what current interest rates are available. You need to know how much you will be paying for the loan. Costs to consider include:
- Origination fees
- Appraisal fees
- Underwriting fees
- Administration fees
- Credit report fees
- Processing fees.
- Don’t apply for a loan unless you need it. A loan costs money, so if you want to apply for a personal loan, only do so if you need the money for an unexpected expense, not to take a vacation you can’t afford. Remember you will be paying monthly for the loan, so taking a loan out should not be done after weighing all the options.
Choosing a Lender
When choosing a lender, make sure they are legitimate and have been in business for a while. If you are using personal loans to reduce debt or to make ends meet, companies like Priority Plus Financial and others can help. They can offer a loan to reduce debt, so that you are paying lower interest on your loan than you would on several high-interest credit cards.
Many of those that take out a personal loan do so intending to become debt-free. More and more people have realized the big fee they pay monthly for the opportunity to use their credit cards and are opting for paying them off and paying cash for necessities.