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    Sometimes, we get into sticky situations with our finances because of an emergency expense that need to be met. Unfortunately, with a meager income and an endless number of things to pay such as your rent, utility bills, or any unexpected expenses, the whole experience can become very stressful for the average person. In this case, what can you do to address all of your needs without having to put yourself into an awkward situation when borrowing money from family and friends?

    While it is true that your loved ones will always be there for you in times of need, there are just some instances when seeking financial assistance can get rather uncomfortable on your end and theirs. They probably have their own concerns at the moment, which means there is no dispensable money that they can lend to you. Then, there is the fear of approaching them and being declined of your request. At the end of the day, the last thing you want is to go through this embarrassing encounter with your dear ones. If all you need is a small amount of money, it should not be difficult asking for some help from a close friend or perhaps even your parents. But then, what if you need more than a few hundred dollars? Who do you turn to when there is the unsettling feeling each time you think about approaching a family member for financial support?

    You have heard of licensed moneylenders and banks offering flexible personal loans to clients. This can be a viable option to assist you when you are faced with a challenging financial issue. There are documents that need to be submitted and subject to approval, yet taking out a loan is a possible solution if you are not quite ready to approach people whom you know. But the question is, should you go for it? Well, unless there is an urgent and strong need to purchase something important, it is not quite advisable to get into the habit of getting a loan. There is no point in borrowing money if you are looking to have a luxurious vacation, or you need a ton of cash to fund your big wedding, or you simply want to buy your dream car. Always remember that it is much better to save for these things, or at least apply for a car loan if you wish to purchase a vehicle.

    So when is it practical to consider applying for a loan? There are some situations when a loan may prove to be reasonable and may even spare you from the added stress of getting into much deeper money issues. Here are some of those moments where you may think of taking out a loan and eventually find a way out of a tough financial concern.

    1. Consolidate your credit card debts

    Having a credit card is without a doubt convenient since you can make a purchase even when you are a little low on cash. But in the same way, the more you use it, the tougher it gets once the time comes for you to make payments. So, if you own multiple cards and each has an outstanding balance of several hundreds of dollars, the goal to pay them all up can get overwhelming. In this case, what can you do to avoid massive interest rates and late payment fees from each card?

    A smart solution would be to consolidate your debts by taking out a single loan. This is much more practical than simply rolling over month after month your existing credit card bills and suffer the consequence of incurring as much as 24 percent worth of interest per year. If you take out a loan with the same amount just as your present credit card debts, you can pay off all your bills right away. Plus, the effective interest rate is only at 18 to 20 percent. While this is still a bit high, it is obviously much lower than the total interest rates when you add up all your late payment fees from several credit cards that you own. However, you have to keep in mind that just because you have already paid off your credit card debts, this does not give you an excuse to continue with overspending and making unnecessary purchases on your credit cards. The idea is to use your personal loan to start living a debt-free life, and perhaps even consider cutting up all of your cards to avoid spending more in the future.

    Make it a point to check which lending institution offers the most competitive interest rates by asking for multiple quotes or using an online comparison tool. But at the same time, avoid those with very low interest rates and high annual fees and processing fees.

    2. Pay off massive transactions when you used your credit card

    Maybe it was never like you to pay your credit card bills at a later time. This is a good habit, but there probably are instances when you have unexpected and major expenses that cause you to have a big debt on your card. If this is the case, an efficient solution is by taking out a personal loan and paying off the bill. The interest rate must be low, however, otherwise it is not worth it getting a loan with a massive fee involved.

    To put it simply, as long as your interest rate from the personal loan is not higher than what you normally pay for your credit card bill, then there is no reason to borrow money at all. You will only undergo serious headaches from having to pay off a loan for a specific period of time with the principal and significant interest rates that add to your stress level.

    3. Cover your emergency expenses

    Yes, it is a must that every person has an emergency fund. There are always unexpected situations that can suddenly come our way, and we have to be prepared for these. But sadly, some people do not have enough for these circumstances that they encounter. What’s more, these issues need to be dealt with right away, particularly if these are expenses that require urgent attention. This is why if this is the kind of problem you are going through, then there is a need for you to think about applying for a personal loan instead of facing the risk of losing a larger sum of money due to interest incurred from late payments. In the same way, medical emergencies also cannot wait, and you have to prioritize these and attend to these concerns immediately. After all, you can always earn money, yet you can never regain someone’s life if you are faced with a serious emergency. You know at times like these, you can always approach licensed moneylenders to get through this temporary period.

    Bottom Line

    It is true that no one wants to end up being buried in debt. There is no such thing that is more relieving and stress-free than knowing that you do not own any money from anyone. However, there are surprises that life throws at us, which will require some cash to cover these urgent needs. It could be a medical expense, a rental payment that must be settled, or credit card bills that just keep multiplying from the interest rates incurred each month. The more you think about these things, the tougher it gets because you have to worry about making ends meet with your meager salary.

    This is why although it is not always appealing for people to take out a loan, there are cases when a personal loan can be a viable solution for these situations. When you need to consolidate a high amount of credit card debt, or you have urgent medical or personal expenses, a personal loan may be able to let you breathe and reduce your stress level to help you get on with life.