Whatever your reasons are for needing to borrow money; whether it’s a home renovation, consolidating debt, or you just have an unexpected expense, you should know there are more options out there then just using a credit card.
While credit cards are a great tool for your everyday spending, and an excellent way to earn rewards for that spending, it’s important to know there are alternatives.
When it comes to needing larger sums of money for things like projects and debt consolidation, a personal loan or line of credit can be a smart alternative. But, what’s the difference?
Personal Loan
Think lump sum. If you’re interested in making a large, one-time purchase and you know the amount you’ll need to borrow, a personal loan could be for you. Your payments will be fixed, making it excellent for budgeting.
Personal Line of Credit
Think use over a period of time. The personal line functions much like a credit card. The amount you’ve been approved for is always accessible, even if you’ve paid it off. You can access the funds whenever you need it, making it ideal for an on-going project, like a wedding.
This unsecured loan differs from a home equity line of credit by giving you immediate access to your funds without having to use your home as collateral.
Before you decide to borrow, determine your need and consider costs and interest rates. Your credit union can help provide you with lower rate loans, making them a more affordable option.
