Getting a money loan may be the first option you think of on many occasions. In addition to knowing how to apply, how it works and what requirements you must meet to be approved, it is important to be aware of the benefits of a personal loan but also its cons.
Learn in this article the advantages and disadvantages and decide if it is the best for you and if, according to your lifestyle and experience, it would be a smart decision to get a personal loan.
If you want to learn more about how Good Life Loan loans work and the steps to follow to get yours, click here.
Benefits of a personal loan
The first thing you need to know is that personal loans can be offered by both large banks (public and private) and companies like Good Life Loan, which have financial business models designed to avoid cumbersome paperwork and other protocols that make getting money complicated.
Broadly speaking, they are businesses that facilitate the approval of personal loans for bad credit and in a very short time. Have you had delays in paying? Do the banks put obstacles in your way? This may be a solution.
Freedom of use
One of the greatest benefits of a personal loan is that you can apply for it to cover any need you may have at the moment.
For example, it is useful if you need to pay off outstanding credit card bills, pay your rent, stock up on food and other daily essentials, or even if you want to go on vacation or start a project and you are going to invest a percentage of your money.
This is an essential factor and you should keep it in mind when weighing the benefits of a personal loan against its disadvantages. The immediacy of resolving a financial emergency may be one of the best reasons to get a personal loan. If you’re interested and have researched the application process, you’ve probably noticed that the requirements are easy to meet. Some of them are:
- Be of legal age (+18)
- Have Canadian citizenship or residency
- Demonstrate a fixed monthly income of 1200
- Be in permanent employment (have been in the same position for 6 months or more)
In addition, the forms are completed online and in 3 minutes. Also, the approval response is given within approximately one hour and the disbursement or direct deposit of the money to your account will take no more than 24 hours or one business day.
Fixed interest rate
Do you know how interest rates work? Something you should be clear about is that they are variable percentages, so they can go up and down constantly. Now, depending on the institution you go to for assistance, it may offer you a fixed or a variable personal loan interest rate.
Generally, one of the benefits of a personal loan is that it is offered at fixed rates. This means that you don’t have to worry about the value of the installments changing from month to month. In other words: you will not be affected by market fluctuation.
Cons of a personal loan
However, you should also be clear that despite the incredible benefits of a personal loan, this is one of the last options you should consider. Before, we suggest you evaluate all the other alternatives and take precautions to avoid deteriorating your financial situation.
Percentage of interest
One of the risks of personal loans has to do with higher annual interest rates. In our case, for example, we have an annual interest rate of 28%. Therefore, that means that you will probably have to pay more depending on the installments and the amount you decide to establish.
To avoid any inconvenience in this regard and only get to enjoy the benefits of a personal loan, it is best to have this alternative only as a solution in emergency situations or if you are sure that you are in full capacity to make the reimbursements in time afterwards.
Accumulation of debts
You should be aware that obtaining the benefits of a personal loan also means that you acquire greater responsibilities. Regardless of whether you apply for $250, $500 or $1500, you will have to pay a new amount to the lender on a weekly or monthly basis.
It is important to keep this in mind because it will be a new expense that you must include in your budget. If you are not cautious and get carried away by the ease of these credits without a background check, you run the risk of accumulating unnecessary debts. In the medium and long term, this can become a disadvantage for your financial stability and freedom.
Remember that on the homepage of our website you can find a calculator that will help you project the value of the payments that you will have to make every one or two weeks, depending on the frequency that you choose and that suits you best.
This will help you know if, based on your fixed monthly income, you will be able to respond adequately to the lender.