Personal loans are slowly changing the way people work with banks. This is partly because the conditions for taking out one of these loans are considerably less strict than that of other types of debt. Furthermore, most lenders will allow you to take out a personal loan without having to put up any collateral, as long as you do not want to borrow too much money.

Overall, personal loans are quickly becoming the most popular type of debt in the US, mostly because the lenders place no restrictions on what individuals can do with the money. As long as you make your monthly payments, you can use the loan to pay for products, buy property, invest in stocks, start a business, or pay for a vacation.

This having been said, the fact that getting a personal loan is extremely easy does not mean that it is a good idea to apply for one. As with any other type of debt, it should be used sparingly to avoid lowering your credit score.

The best time to take out a personal loan

Borrowing money from lenders like Adherents, especially in large amounts, only makes sense if you know that it will be actively useful to you. In other words, getting a personal loan is a great idea if you want to start a business and have everything figured out but need more money to get things off the ground. You can also borrow money and use it to pay for urgent expenses such as medical procedures, medication, assistive equipment, or to pay your taxes.

Personal loans can also be used to consolidate existing debt, however, most banks will usually give you a better deal if you ask them specifically for a debt consolidation loan.

The common denominators here are urgency and usefulness. The best time to take out a personal loan is the moment when you need a large amount of money to pay for something important. Borrowing money from the bank to buy an expensive phone or laptop, or to use for day-to-day expenses while you have a stable source of income doesn’t count as an emergency.

Technically speaking, if you want to take out a personal loan, you should keep your eyes open and choose the moment when lenders offer the best deals. On one hand, make sure that your credit score is as high as possible. On the other, look at how the economy changes and either get a fixed-rate loan when the terms and conditions are good or a variable rate one if you estimate that the rate will drop in the near future.

The worst time to get a personal loan

As a rule of thumb, if you do not have an urgent need for money, you should avoid taking out any type of term loan. While you may be tempted to use the money that you can borrow to buy electronics, clothes, or other premium items, the loan would cost you more than if you were to save up cash and get the products. This is because you have to also factor in the interest rate, which will grow if you either have a low credit score or borrow a very large amount of money.

Generally speaking, the worst time to get a personal loan is when the economy is unstable. Even if you get a fixed interest rate, the instability may cause other expenses to grow or even lead to you losing your job. Furthermore, if your credit score is low, lenders may refuse to give you unsecured loans, of any type, and also give you disadvantageous terms and conditions.

Use alternatives if you’re not sure about getting a loan

If you want to buy an expensive product, a gift, or need money to go on a short vacation, there are other ways of getting the money that you need. Payday advances are often offered by employers and there are also several online platforms that give out short-term loans. However, you should keep in mind that regular loans will affect your credit score while online ones will not be reported to credit register companies.


Personal loans are easy to get, but they can damage your financial record if not handled properly. Try to avoid taking out personal loans in order to pay for products and services that you do not need and always take into account how the economy is changing. Taking out unsecured personal loans in times of instability can damage your credit score and secured ones may lead to the banks taking your property.

Unless you are facing an emergency and need to get a large amount of money, making a monthly budget and saving up is better than borrowing money.

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