There can be various reasons why one chooses to apply for a consumer loan . We have considered 5 situations where a loan without collateral can become a topical solution.
1. A consumer loan can collect all your debt in one place
The first scenario is that you have some small loans and debts from various credit cards. Then you can take out a consumer loan and use the money to pay down the various debts. This way, you get all your debts together in one place, which means better overview, and you can also secure lower interest costs. Consumer loans are known to be expensive, but credit card debt is usually even more expensive. Furthermore, it can be difficult to keep track of several loans with short maturities. Then you forget quickly here and there and have to struggle with subsequent interest rates and any additional fees imposed.
2. The house needs repair
In the second scenario, there is a need for repair work on the house. Unforeseen expenses can quickly emerge and if there is damage to the house it can incur greater costs if nothing is done right away. The assessment question then becomes whether interest expenses will cost more or less than the consequences of non-maintenance. Especially if the damage is such that it makes it pleasant to live there, it can bite the scale in favor of loans.
3. A consumer product breaks down
In the third scenario, a consumer product breaks down. Some objects we simply cannot do without. What would we do without a refrigerator in working order? What if the washing machine suddenly stops working? It may take time to save enough to replace the item, and in the meantime you need to wash your clothes. You have a permanent job, control of the finances, and know exactly how long you need to save. You just don’t have the money right now.
4. The car breaks down
In the next scenario, it is the car that fails again. The car was old and you chose to drive without a hitch. The car is not worth repairing anyway, so what you need is a new car. Where you live there is no alternative to being without a car for a few months. Maybe your job also requires you to have a vehicle. You know that you can get the money and how long it will take, what you have no chance is to wait.
5. Holidays you’ve always dreamed of
The last scenario is that you finally have the opportunity to go on your dream vacation. Expensive vacations may be something you should steer clear of if you can’t afford it, but both you and the partner work a lot and it takes a lot of time to make it sound timely for both. The occasion does not come back immediately. You are missing the money right now, but the economy is otherwise good and you know exactly how much time you need to save together enough to repay. One must think carefully and be confident in one’s own financial situation before taking out a consumer loan. But here are five scenarios where such a loan could certainly be a good idea.