Personal Loan Mistakes

Personal loans are intended to be used as a last resort in a financial emergency. Unfortunately, in America, we have a hard time separating needs from wants. Here are 3 common mistakes consumers make:

1. Using a personal loan on gifts for yourself or others. Admittedly, there are a lot of social pressures to buy expensive gifts for friends and loved ones. Jeopardizing your credit isn’t worth the 10 minutes of fun your nephew will have playing with that several hundred dollar robot.

2. Taking out a payday advance if you cannot repay it by your next payday. Too many people take out a personal loan without thinking about how they’re going to repay it. Consequently, this loan could end up costing you twice as much as the original loan amount. You’re better off asking for a loan from a close friend or family member.

3. If you have good credit. A big mistake people make is taking out a payday loan with good credit! If you have good credit, it’s MUCH better to take out a small loan from your personal bank or local credit union.

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