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Five ways a personal loan can work for you

Consumer Tips
Five ways a personal loan can work for you

We all know that auto loans are for purchasing new or used vehicles, mortgages are for buying a home and small business loans are for purchasing needed supplies and equipment to support your livelihood. But what about expenses that don’t fit neatly into a category? For everything else under the sun, Arsenal offers personal loans. Just about anyone can benefit from a personal loan, including you. Here are five reasons why you should consider this lending option.

1. It beats dealing with payday lenders

According to Consumer Federation of America, the average loan term for a payday loan is about two weeks, and the loans typically come with a 400 percent Annual Percentage Rate (APR) or more. All you need to get a loan like this is a bank account in relatively good standing, a steady source of income and identification. Payday lenders do not make loans based on creditworthiness, but instead based on their ability to collect.

Most consumers who open payday loans roll them over from week to week, paying only a minimum payment instead of the entire balance. This leads to a cycle of more interest accumulating, making it harder and harder to pay the loan. Because of this vicious cycle, borrowers default on one in five payday loans from payday lending stores. Even worse, about half of all people who get a payday loan online default.

Rocket launching - Arsenal Credit Union Personal Loans
This is what happens to your interest rate when you use payday lenders

Better rates. Better lending practices.

On the other hand, rates on personal loans at Arsenal range between 9.99 to 17.99 percent APR (as of June 10, 2019) with terms up to 60 months. At Arsenal, and at other reputable personal loan companies, this option is a fast way to borrow the money you need while paying a fair, reasonable interest rate.

2. Predictable payments

Personal loan interest rates are flat. Unlike a credit card, the minimum payment doesn’t change based on how much you spent for that statement period. Also, when you open your personal loan, you receive a set, monthly payment date. Instead of scrambling for a monthly payment, a personal loan gives you the freedom to create a monthly budget and stick to it.

If you have enough money, you can pay off your Arsenal personal loan early with no additional charges. Some other personal loan lenders may charge if you choose to do this.

Loan and bar graph graphic - Arsenal Credit Union personal loans

3. Better interest rates than credit cards

A credit card is a great addition to your financial toolbox – especially one from Arsenal with a low interest rate. It allows you to make purchases in emergency situations and earn points to redeem for merchandise and cash back. A credit card also comes with a higher interest rate then a personal loan – especially credit cards offered by retailers and big banks. Personal loan interest rates can be much lower, which is especially helpful if you don’t plan on paying your credit card balance in full every month.

A personal loan is also a safer option for someone who doesn’t have the best financial habits. With a credit card, you can keep spending and spending, increasing your balance, maxing out the card and hurting your credit score. With a personal loan, you get the money in a lump sum and must pay the minimum payment each month. You can’t keep drawing on it.

4. A financial opportunity when you need it

Life happens. Your air conditioner might go out in the middle of summer or your pet might need to go to the vet. Maybe you just landed a job in a new city and need unplanned money for a plane trip and a place to stay while you get settled. If you’re planning a wedding, you might have to pay for 20 extra guests. Sometimes you just get the urge to backpack through Europe for a month.

Woman at the airport - Arsenal Credit Union personal loans
Your dream vacation could be within reach

It doesn’t matter what life throws at you, because you can use a personal loan to pay for it. In fact, there are no restrictions on what you can use a personal loan for. Just remember that your personal loan must be paid back and that you are accruing interest on it, so always consider whether or not what you want to purchase with it is a wise investment.

5. Consolidate and organize your existing debt

Existing credit card debt can crush your finances. Having multiple credit cards with outstanding balances is not only expensive, it is also hard to keep track of. By using a personal loan to consolidate and organize your debt, not only can you possibly get a better interest rate, you’ll also consolidate several monthly credit card payments into a single payment with Arsenal. Forget about logging into multiple banking websites, remembering dozens of username/password combos and forgetting payment dates.

Are you ready to talk to us about a personal loan?

Woman eating breakfast on her phone
Apply for a personal loan over breakfast on your mobile device

If you’re interested in a personal loan, we’d love to talk to. Just visit us at one of our branches or contact us by phone. You can also start a live chat with an Arsenal representative to get the ball rolling.

If you’re ready to apply for a personal loan online, just click here.