Personal Loans for Financial Wellness

Financial stress affects at least a third of Canadians, leading to sleepless nights and even physical issues or illness. To set yourself up for success with financial wellness a good place to start is dealing with outstanding debt, and using a personal loan to consolidate that debt can bring you closer to peace of mind.

Improving your personal finances not only allows you to breathe easier and remove some stress in your life, it can also help reduce anxiety and improve your quality of life. While there are many aspects of financial wellness, dealing with debt is often the place to start, especially when it’s higher interest loans.

Refinancing Your Debt

When you have outstanding debt such as loans, lines of credit or even credit card debt, there are often times where a personal loan can consolidate your debt with lower interest rates and leave you paying less each month. Having more room with your expenses can allow you to afford or save more. With lower monthly payments and a plan to reduce your debt, you’re on a path that can improve your personal finances.

RELATED: Dealing with Debt and Financial Stress 

Pay for a One-Off Purchase

Those that qualify for a personal loan with a lower interest rate than your credit card can help you afford to finance a one-off purchase. While saving up for things the old fashion way costs you less in the long run since there’s no interest, for those that would prefer to make a big purchase sooner than later, a personal loan can make this a reality. 

RELATED: How to Lower Your Bills and Save 

Building for the Future

If your credit score is only fair or has yet to be established, taking a personal loan and making monthly payments can improve your score for when it’s important, like when you are thinking of buying a home. This is especially true if you have a limited credit history. Improving your credit score for the future can help you get better interest rates, which could save you a substantial amount later. Making use of budgeting software and apps can help manage your finances and keep you on track to building your credit score.

RELATED: Financial Strategies to Combat Inflation 

Expand Your Ability to Earn

Personal investments in your training, education and yourself can pay off later. It doesn’t matter whether you’re an employee or a freelancer. If you’re an employee, it could be additional courses or training to help you reach the next level in your career. If you’re self-employed or a  freelancer, the extra funds from a personal loan could help you with expenses to help get your business moving. Investing in yourself is a way to build your financial future. With less debt later, you’ll be able to save more, set financial goals, and possibly even procrastinate a little less.

RELATED: How to Improve Your Financial Future 

What is a Personal Loan?

This is a type of unsecured debt, meaning it doesn’t involve collateral like a car or home, and these types of loans are offered by banks, credit unions, as well as online lenders. The term, or length of time agreed to for paying back a personal loan is often 12 to 60 months. 

RELATED: Personal Loans and Credit Card Debt

What can a Personal Loan be used for?

The most common reasons for a personal loan include debt consolidation, large purchases, and home renovations, but they can be used for just about anything from medicals bills or car repairs to travel and more.

Bottom line

When it comes to financial wellness, there’s a reason why consolidating your debt sits at the top of our list for ways to deal with what you owe. Getting your debt under control would have to be a leading reason among money experts and financial wellness advocates. Consolidating your balances will help get you on track for a healthier financial life. 

RELATED: How to Eliminate Credit Card Debt with Personal Loans 

A personal loan can be used for anything from major purchases to medical bills, car repairs and most other expenses. While a higher credit score usually assures you of getting lower interest rates, even people with fair to bad credit can get loans. 

RELATED: Does Applying for a Personal Loan Affect My Credit Score

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