Completing school, building a career, buying a car or a home, getting married, and having children. These are only some of life’s biggest and most exciting milestones. As these milestones pile up however, so do the expenses!

While it would be great to be financially ready for all these milestones, we all know that that isn’t always possible. This is why sometimes it doesn’t hurt to get some help in order to keep moving forward. For many Kiwis, a personal loan can be a legitimate solution.

If you’re planning to get a personal loan, you’ve landed on the right page. Here we’ll share some good reasons to get a personal loan, as well as some information you need to know when taking out a loan.

What is a personal loan?

A personal loan is a fixed amount of money borrowed by individuals to meet their personal needs. This could mean paying for a new car, a house renovation, or a dream wedding. Personal loans are offered by banks, credit unions, and online lenders, and are repaid over a set period and with a fixed amount.

There are two types of personal loans: secured and unsecured. An unsecured loan won’t require you to pledge any collateral. This means your possessions aren’t at risk if you fail to pay. However, interest rates are much higher with an unsecured loan, and borrowers generally need to have high credit ratings to get approved.

Secured personal loans, on the other hand, require borrowers to put up collateral. They tend to come with higher borrowing limits and offer lower interest rates. At QuickCash, we provide both secured and  unsecured personal loans. There are no hidden fees and early repayment fees to worry about, and the interest rates always stay the same, unlike a lot of our competitors.

What are good reasons to get a personal loan?

With a personal loan, fulfilling any obligations while enjoying financial flexibility can be possible. Here are 9 situations where taking out a personal loan can help:

1. If you’re struggling to keep track of debt from various creditors

One of the most popular reasons individuals apply for a personal loan is to consolidate debt. Debt consolidation is the process of combining multiple debts into one single loan so you just need to make one single repayment every month.

When you have multiple loans from various creditors (each with their own interest rates, monthly payments, and due dates) it can be hard to keep track of everything. This can result in missed payments and cause you to pay more interest over time. Borrowers find debt consolidation a viable option because it minimises stress and helps them save time and money.

You can use a personal loan to consolidate and pay off unsecured personal debt such as your credit card bills. Student loans or mortgages on the other hand, typically can’t be included.

2. If you need to repair or renovate your home

Does your kitchen desperately need an overhaul? Are you planning to convert one of your rooms into a home office? A personal loan can help fund any home project you want to undergo. Taking out a loan to complete a home repair or renovation can prove to be a good investment in the long run. This is because renovating and remodeling can potentially boost the value of your home, especially if you’re interested in selling it.

According to experts, the top three home remodeling projects that deliver the highest returns include garage door replacement, manufactured stone veneer, and minor kitchen remodels.

3. If you have a medical emergency

A medical situation may not be your first thought when it comes to getting a personal loan. Ideally, your health insurance and the New Zealand government should cover health expenses. They don’t cover 100% though, and medical bills or extra expenses due to being unwell can often pile up over time. For circumstances like this, a personal loan can help you ease the financial burden.

By taking out a personal loan, you and your family will have the ability to access the funds you need to deal with bills and upcoming treatments and, in the process, enjoy a smooth and stress-free recovery. Additionally, being able to spread out the cost of your treatment, rather than shelling out a lump sum payment, can help make repayments more manageable.

4. If you need to finance your legal costs

In New Zealand, legal representation doesn’t come cheap. In fact, many lawyers charge $292.70/hour on average according to the NZ Law Society. Aside from the consultation fee, lawyers can also charge a flat fee, retainer fee, and contingency fee. These costs can quickly add up and hurt your finances especially if you’re not prepared.

A personal loan can be a reasonable option if you can’t shoulder these legal costs right away, given that many lawyers require up-front payments or deposits. With a personal loan, you can pay back your legal expenses in monthly installments over a fixed period of time and at set interest rates.

5. If you want to achieve your dream wedding

Everybody wants to have a fun and memorable wedding day. Good food, lovely location, plus the presence of family and friends can make the occasion extra special. The fact is that weddings are an expensive affair in New Zealand.  According to New Zealand Weddings magazine, the average NZ wedding costs a whopping $30,000.

Even if you choose to have a simple and intimate wedding it will still come with a price tag, especially if you are funding your wedding alone.

A wedding loan can minimise the financial stress that comes with wedding preparations. By borrowing from a lender, you will be able to achieve your dream wedding and even polish your credit score with all the upcoming months of timely payments.

6. If you have a small business venture

Starting a small business can be an exciting yet extremely daunting venture. You’ll need commitment and put in long hours to realise your dream. Not only that, but you’ll also need a plan to get your startup funded. As any entrepreneur knows getting funding when your business has not opened its doors can be next to impossible. This is because most institutions typically only offer to finance companies that have been in business for at least one year.

If you don’t meet this criteria, don’t fret. You can opt for a small business loan or, depending on the lender, take out a personal loan for business purposes.

At QuickCash, we offer loans for businesses of all sizes. With the correct information, we may also consider you for a personal loan to help fund your new business. All you have to do is to talk to our team about your situation so we can find the best solution for your needs.

7. If you’re moving into a new home

Securing money for rental bond is one of the many good reasons to get a personal loan. Many Kiwis understand how expensive it is to move to a new rental. Aside from settling the final payment from your previous lease, you also need to settle the advance payments and bond required by landlords. A rental bond loan can help cover these requirements so you can secure your ideal home.

8. If you have a major expense you can’t put off

If there is a major expense you’ve deemed to be more of a need than a want, a personal loan can help secure your future. This could be expenses related to relocating for a new job, or when your only computer dies on you and you don’t have savings on hand. A personal loan can be a good consideration in a situation like this. It will provide you with access to funds that will allow you to take advantage of an opportunity.

9. If you fall into an unexpected difficulty

Life has its highs and lows. Sometimes we may find ourselves facing difficult situations that are emotionally, psychologically, and financially challenging, such as an unexpected job loss, death of a loved one, natural disasters, and the like. Even if you’ve prepared for rainy days like these, your savings won’t last forever. Fortunately, you don’t have to feel helpless.

Personal emergency loans are a relief option for individuals who fall into unexpected difficulty that requires quick cash in hand. Unlike cash loans, personal emergency loans are processed quickly and efficiently, have fixed interest rates, and come with reasonable repayment terms.

Factors to consider when getting a personal loan

While there are many good reasons to get a personal loan, it’s worth mentioning that borrowers also need to look at other factors in order to make an informed choice. We’ve compiled a list of factors to consider, with links to more information on each.

Choosing a lender

Various institutions offer personal loans and cash loans. These include banks, credit unions, and online lenders. Because taking out a loan is a serious financial decision, it’s important to choose a legitimate and reliable lender to address your needs.

For more information, read our article “How to Choose a Cash Loan Lender”.

Comparing interest rates

Interest is part of any loan agreement. It basically refers to the cost of borrowing money. The amount of interest you pay will depend on your lender as well as how they deem the loan to be ‘risky’. At QuickCash, we set our interest rates based on the Loan to Value Ratio (LVR). This takes into account the money you’re borrowing and the security you have pledged.

For more information, read our article “How Does Interest Work on a Loan?”.

Ability to repay the loan

Another thing to consider when you are planning to take out a loan is whether you also have the ability to repay it. You can get approved for a loan in minutes but paying it back may take months or even years. In order to repay your loan, you must be committed and make a sound plan. Consider whether you are able to earn extra cash, cut unnecessary expenses, and of course, avoid missing payments.

For help repaying a loan, read our article “How to Pay Off a Personal Loan Fast“.

Evaluating your current financial situation

Are you paying your bills late? Are you unaware of how much you owe? Do you lack a budget or savings? These are some of the tell-tale signs that say you might have a major debt problem, and thus need to evaluate your situation. While you may feel hopeless in this situation, it is never too late to take control of your finances.

Read our article on “Tips on How to Manage your Finances“.

Other reasons for getting a loan

As outlined above, there are plenty of good reasons to get a personal loan. However, there are also a number of reasons for getting a loan that won’t get you approved. These include using the loan for gambling, illegal activities, large business ventures, university tuition, or as a gift to someone else. Remember to apply for a personal loan only when you need to get financing for urgent situations, not when you simply want more cash.

For more information, read our article “What Can I Use a Personal Loan for?”.

The bottom line on personal loans

A personal loan is a valuable tool for people who may find themselves in any of the situations we have mentioned above. Whether you’re looking to consolidate multiple debts, improve your home, fund an emergency, or start a business, a personal loan can be a viable financing option to cover any need.

At QuickCash, we pride ourselves in offering easy and fast personal loans when you need them. We have been in the business of responsible lending for two decades and have helped thousands of Kiwis in all of their unique circumstances.

Aside from providing top-notch customer service, we also offer efficiency. We let you apply for personal loans for various purposes without hassle. You can even complete your application online within minutes! Unlike our competitors, we don’t penalise you for early repayment. On top of that, we provide fixed interest, as well as an optional Payment Protection Insurance (PPI) for your peace of mind.

If you have any more questions or want to apply for a loan, contact us today! Our team would be happy to assist you.

If you have any questions about this article, or about personal loans in general, feel free to call us on 0800 784 252.

Disclaimer: This article is intended to provide general information only. It does not take into account your financial needs or personal circumstances. It is not intended to be viewed as investment or financial advice. Should you require financial advice you should always speak to an Authorised Financial Adviser.