3 reasons why people get a personal loan

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Getting a personal loan is something that everyone thinks about from time to time. Here are the main reasons why people seek a personal loan and it may just help you decide if you need one too.

Credit card bills/consolidate loans

You may have heard this before, but people often get personal loans to pay off their credit card debt. The first thing to do is to talk to your financial advisor about this option. It can sometimes be the smarter and often offers a much lower interest rate compared with a credit card.

In times when you have more than one credit card, a personal loan allows you to consolidate all of your debt into one easy monthly loan repayment.

Travel/holiday

It is well-known that going on holiday can give you a much needed reprieve from stress. But how important is it? Forbes suggests that taking a two-week holiday can do wonders for your physical and mental health. Psychologist Deborah Mulhern says that not having regular holidays makes it harder for our minds and bodies to relax.

A personal loan can be used for a holiday to elevate stress and refresh your energy to be more productive at work. A survey by Tourism and Transport Australia reported that at the end of 2015, 40 per cent of Australians said it would be business as usual during the holiday period, with only 13 per cent saying that would take the public holiday off. Although this shows we are a hard working nation, having breaks is crucial for fending off burnout.

Car troubles

Over two-thirds of Australians have trouble with their cars in the first five years of ownership, according to spokeswoman for Choice, Erin Turner. Owning a car will often come with added expenses and you may need a little emergency cash when car troubles arise.

Using automotive industry research, Drive showed the detailed cost of car repairs for a standard Holden Cruze. Just a broken tail light can set you back $300. If you need to replace your car then a personal loan or car loan can help.

Whatever the reason for a loan,  the team at Border Bank can help you with all your money decisions. Personal loans can be the start of planning for your future and building a good credit rating.