4 Types of Personal Loans That Can Pull You Out of Debt – Our Guide

Sep 05, 2019

Let’s face it: money can be hard to come by sometimes, especially when living paycheck to paycheck is your only option. When you rely on the salary coming in every month, however, it’s easy to find yourself in a pinch when you need money to deal with unexpected expenses.

Fortunately, settling problems where cash is needed right away can be solved much more easily through a personal loan. Debt is often seen as a negative thing, but it’s actually incredibly helpful for giving you the financial support you need to get out of a tight spot. 

Thanks to loans becoming much easier to access, lenders have stepped up to meet rising demands and lending rates by offering personal loans that range between a couple of hundreds of dollars all the way to the thousands. Generally speaking, a personal loan can be used for anything, but they do come in different forms to suit different purposes and needs. 

The majority of personal loans offer anywhere from one to five years for repayment. They come in different forms, types, prices, promos, and specifications. In order to find the perfect personal loan for your needs, it’s important to brush up on essential information that can help you make the best decision.

Personal loans to choose from

Itching to get out of a bad financial situation with a personal loan? Here are the different types of personal loans that you can apply for (and how you can make the most out of them): 

  1. Credit Builder Loans

As implied by the name, credit builder loans are designed to help South Africans improve their credit, whether they are rebuilding low scores or looking to build credit as first-timers. Typically, a credit builder loan is secured with a savings account (but can also be unsecured depending on the terms and lender or provider), which makes it much easier to maintain stability. Credit builder loans function in a way that makes it conducive to make on-time payments at a minimal interest percentage—a strategy that leads to greater financial opportunities, savings, and discounts from any loan provider in your area.

Often, credit builder loans can be availed of with ease due to the fact that they have a relatively small balance requirement while being payable in just a few months. That said, try to avoid stopping payments if your loan is secured in order to avoid a loss in collateral. 

  1. Vacation Loans

Unsecured by design, vacation loans are the answer to an aspiring traveller’s dreams and hopes. These loans boast quick applications, easy approval, and outright financing for trips to anywhere in the world. Although a vacation loan is a quick and easy way to capitalize on any free time you might have with an unforgettable situation, you may want to consider the fact that reality may set in after you arrive from your trip because of the fact that you’ll be left repaying the loan for quite some time. Vacation loans can last for around several months to years, which makes them an option that you should only opt for if you need to go somewhere ASAP and don’t have time to save up. 

  1. Wedding Loans

They say that love can’t wait—but a loan definitely can, as long as the interest is just and paid on time. Classified as a loan for a specific purpose, wedding loans are typically unsecured and can be availed of in order to generate a financial safety net when going through the expensive and stressful wedding planning process. With a wedding loan, soon-to-be-newlyweds with a good credit score can enjoy a level of financial stability while having their dream wedding (and as an added bonus, these loans can also be customized to fulfil certain needs). To make the most out of a wedding loan, make sure to save up as much as you can so that you’ll only have to borrow an amount that won’t break the bank with monthly interest!

  1. Debt Consolidation Loans

Some people believe that the most difficult part of having debt is dealing with monthly payments. However, nothing is worse than keeping up with multiple debts. A great way to manage to pay off multiple channels of debt is to secure a debt consolidation loan that can unify all payments into one place to make for a quick and easy experience. The best way to make the most out of a debt consolidation loan is to pay it off with a credit card so that you can improve your credit utilization score. That said, if you do choose to do this, be cautious and controlled because excessive credit card use can leave you in even more debt. 

Conclusion

When used right, personal loans can pull people out of bad situations and help them ride out a tough time. Regardless of why you’re taking out a personal loan, why not consider doing so online with Hoopla Loans? We’ll help you get the cash you need in the least amount of time possible. Apply online for a personal loan today!