The overwhelming size and scope of the COVID-19 crisis has left many Americans scrambling to stay afloat. Even the most level-headed spenders and savers have faced financial uncertainty amid nationwide business closures and mass layoffs. Since March 2020, tens of millions of Americans have filed for unemployment, and millions more have requested student loan or mortgage relief through government aid programs.
As the economic crisis continues, you may be looking for new ways to invest in your financial wellness. Whether it’s reducing debt or paying overdue bills, a personal loan could be a smart way to keep your finances on track.
How can a personal loan benefit you during COVID-19?
For those who qualify, personal loans can be a straightforward way for borrowers to access funds to reduce debt, build an emergency fund or pay an unexpected bill. What’s more, they can be a lifeline in the pandemic, as so many people have experienced job loss and don’t have the funds needed to cover mounting bills.
In fact, one Michigan loan recipient told us, “Because you can use your personal loan to pay for what you need, it can make a big difference in taking care of your family during the current economic crisis.”
The pandemic has also prompted many people to financially prepare for future setbacks. When looking at America’s financial habits during early months COVID-19, TransUnion recently discovered many consumers were actively decreasing their debt loads as a direct result of the pandemic. If you aren’t among those pandemic super-savers, a personal loan could be a smart way to consolidate your debt and create some financial headroom. As one personal loan customer reported, “This came in time when I have to move and freed up my income. I paid off all my cards and was able to focus on saving, especially during these difficult times…”
How can personal loans help you maintain financial wellness?
With a personal loan, you can consolidate multiple high-interest debts into one fixed-rate loan, giving you a fixed monthly payment. You may also be able to customize your repayment term. In the end, this can save you hundreds, even thousands, of dollars in interest. “It came at the right time,” one loan recipient recalls after using a personal loan to consolidate her debt. “The interest rate was much lower than my credit cards and provided a quicker way to pay things down.”
You can also use a personal loan to cover expenses you aren’t financially prepared for. Maybe your child suddenly requires expensive remote learning tools, your home needs an unexpected repair or you’ve had a medical emergency. A personal loan can keep you from dipping into emergency savings.
Some lenders, like Discover Personal Loans, allow you to design your personal loan around what works best for you. While lenders may place limits on borrowing amounts, you have flexibility in how much you’d like to borrow, as well as in borrowing terms and rates that make sense for your personal financial situation.
Is now the right time to apply for a personal loan?
No matter the circumstances, it’s always vital to make measured decisions regarding money. If you’re considering a personal loan, it’s important to accurately assess your financial wellness first. If you have good credit, a steady income and need to access funds without any limitations on how to use them, you may be in a good place to secure a personal loan.
Taking on new debt might not make any sense for you right now. But if you.ve received an unexpected medical bill, or you’re in sudden need of a house or car repair, a personal loan may help you avoid costly late fees on outstanding balances. Or, if you decide you’d like to pay off a credit card bill, a personal loan might help you reduce your debt.
Another personal loan customer recalls accessing money during the current crisis. “This loan came just at the right time to provide a little bit of breathing room. Just a quick online form, a phone call and boom, funds were in my accounts within days.” With rapid access to much-needed cash, a personal loan can allow you to catch up, rather than sink further into debt.
How can I get started?
If a personal loan sounds right for you, it’s important to choose a lender you trust. You’ll need to be comfortable with the lender, and it helps to choose a bank with an easy-to-understand online interface. Assessing your choices can be especially difficult at a time where personal interaction is limited and lending spaces are saturated with cash-strapped clients.
JessL, a New Yorker working with Discover to get a personal loan, shared her experience, saying, “I applied for and received my loan during the chaos of the pandemic when many customer service centers were understaffed.” During a time of immense financial pressure, JessL says she was relieved to interact with “real humans who spoke like humans talking to another human. They were quick, courteous, knowledgeable, patient and actually listened and answered questions without a script.” Experiencing the added touch of someone who wants to listen and help you tackle your financial challenges can empower you to thrive financially.
The COVID-19 pandemic has given many people an opportunity to reevaluate what is most important for their financial health. If you decide now is the time to request a personal loan and simplify your finances, pay for your child’s education expenses or take care of that long-overdue kitchen remodel, a personal loan may be a useful financial tool for you.
Read more about the borrowing concepts that are important to understand before applying for a personal loan.