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Personal loans can help fill the void while waiting for relief from the coronavirus. (iStock)
As the COVID-19 pandemic continues to affect the financial well-being of millions of Americans, Congress has reached agreement on a new coronavirus stimulus package. On December 27, President Trump signed a $ 900 billion federal relief plan that included a second round of stimulus checks.
The package offers up to $ 600 for qualifying single taxpayers and up to $ 1,200 for married couples who file a joint return. An additional $ 500 is paid for each dependent child. The federal relief bill extends the moratorium on rental evictions until January 31, although it does not extend the forbearance for federal student loan debt which also expires at the end of January.
Now, under the Biden administration, Congress may consider sending another $ 1,400 stimulus check – but that amount is not guaranteed. If you need more cash and want it now, there is an easy option: personal loans.
How to get money fast
If you’re struggling financially because of the coronavirus pandemic, taking out personal loans might be a better alternative to using credit cards to cover daily expenses. Here’s a look at how a personal loan could help you stay afloat during COVID-19.
Personal loans offer some flexibility in that you can use them for a variety of expenses. During the coronavirus pandemic, that could mean daily expenses, such as utility bills, rent, or groceries.
You can visit Credible today to quickly compare rates and terms for personal loans ranging from $ 1,000 to $ 100,000 and find a lender who meets your needs within minutes.
You can also use a personal loan to fund emergency expenses, such as medical bills or a major auto repair, when your emergency fund is depleted. Technically, you can even use the proceeds of a personal loan to meet mortgage or student loan repayments, if needed.
With student debt, you may be better off exploring options for student loan forbearance, deferral, or refinance first if you’re having trouble managing payments. If you need student loan relief, in particular, and you don’t qualify for federal benefits, you can refinance your student loans through Credible. Credible can help you compare rates and find the lender that best suits your needs.
WHAT SHOULD YOU USE A PERSONAL LOAN FOR?
Why is a personal loan a better option than a credit card?
A credit card can be a convenient way to pay for things, while potentially earning rewards on purchases. But there are a few drawbacks:
- Paying off credit card debt can be difficult if you have a high variable interest rate
- Having a large amount of unpaid debt over your credit limit could negatively impact your credit score
- Paying a late bill could incur late fees and lead to negative items on your credit history, which could damage your FICO score again.
Having to pay off credit card debt can also make it difficult to meet your personal finance goals. If a large chunk of your income is used to pay off your debt each month, that’s less money you need to save or just get ahead of your bills.
Personal loans can offer a lower fixed interest rate if you have a good credit history and a good credit rating. And the monthly payments are predictable, which makes it easier to budget to pay off debt. Learn more about personal benefits through Credible.
Can I use a personal loan to consolidate my debt?
If one of your financial goals is to get out of debt, personal loans can help. A debt consolidation loan allows you to combine multiple debts into one, with just one monthly payment. You can use a personal loan to pay off your debts, including credit cards, loans, and other lines of credit.
Debt consolidation could also help you pay off your debts faster if you are able to secure a low fixed interest rate. And when you go from multiple monthly debt payments to just one, budgeting can become less stressful.
If you decide that debt consolidation is the right step, it’s important to shop around for the best type of personal loan, the best rates and terms. Fortunately, Credible makes it easy to compare credit and business rates.
SHOULD YOU GET A PERSONAL LOAN TO PAY A CREDIT CARD DEBT?
How much personal loan should you take out?
If you are considering personal loans to manage your debts during the coronavirus pandemic or just to cover your daily bills, it is important to consider how much money you can actually afford to borrow.
Taking too large a personal loan means more debt to pay off. But taking out a loan that is too small could leave you with a funding gap to fill. Using a personal loan calculator can give you an idea of the type of monthly payments you can expect. Visit Credible to find the best personal loan rates.
HOW TO IMPROVE YOUR CHANCES OF OBTAINING PERSONAL LOAN APPROVAL
What are the other ways to increase my budget?
Another coronavirus stimulation program could be in the works under the incoming administration of Biden. In the meantime, you can increase your budget by:
- Eliminate all non-essential expenses
- Take advantage of student loan relief options, including student loan forbearance, deferral, or refinancing
- Seek help through government sponsored programs, such as SNAP or LIHEAP
- Explore secondary ideas and other options to increase income
If you’ve tried these things and still need financial help, consider shopping around for a personal loan. You can visit Credible to compare the interest rates and loan options of several lenders. Credible’s experienced loan officers are available to answer all of your personal loan questions.
7 SMALL PERSONAL LOANS TO CONSIDER IF YOU NEED ADDITIONAL MONEY
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