6 things for which you should not take a personal loan

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Sometimes, when there is a shortage of money, personal loans, which are often considered a good alternative to credit cards, will help to have a good vacation, since they tend to have lower interest rates. However, before you take a personal loan, you should think twice.

Site GoBankingRates 6 called things for which you should not take a personal loan.

Holiday gifts

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You shouldn't take out a loan to buy gifts for your friends to impress them, or to give your family members everything they want. The last thing your loved one would want is for you to go into debt for gifts. In addition, attention is much more important than the gift itself.

If the money for gifts is still not enough, cut down their list or reduce other expenses. For this it is worth refusing small expenses. For example, from trips to cafes or restaurants. Do not think it is forever. Holidays will pass, and you can again please yourself.

Gift for yourself

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Almost 60% of consumers plan to buy something during holidays this year, according to the National Retail Federation.

If you decide to buy a large-screen TV that you could not afford before, this will adversely affect your credit score. Then it will be harder to get another loan if you need money for an emergency. Instead of increasing your debt, put off a little each month, and then you will have enough money to buy something for cash.

Wedding ring

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December is the most popular month among those who want to offer a hand and heart to their second half. If you want to make an offer, but do not have enough money to buy a ring, you should not take credit for this.

“By taking out a personal loan for an engagement ring, you'll be making a huge mistake, and it could possibly backfire in the long run,” said credit expert Tyne. “You don’t want your marriage to start with losses.”

You can start saving in advance for such a delicate purchase or buy a ring, the cost of which will not lead you into debt.

According to a GOBankingRates survey, more than half of men and women believe that a ring should not cost more than $ 3000, and one third agreed that a ring should cost less than $ 1000.

Big party or holiday

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You can throw a big party for friends or a holiday for relatives. “That’s good,” Frankl said. “But don’t use food and entertainment to impress if you need to borrow money.”

Instead, Frank recommends asking friends and family to participate in creating the table: distribute who brings what dishes, drinks and alcohol. There is nothing shameful about this. Most people will be happy to participate.

You can also feed guests with products purchased earlier during sales or limit the list of guests, thereby reducing the cost of the table.

Plastic surgery

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You may have thought about plastic surgery and believe that this will be an ideal gift for yourself for the holidays, and the surgeon offers a personal loan, where the first 12 months are interest-free.

Consider what happens if you take out a loan. Ask yourself if you have enough money to pay off your loan within 12 months. If not, consider whether you will have the money to cover the monthly payments plus interest.

“If you think you can pay off the entire loan within the interest-free period, then this option could be beneficial,” the loan officer said. “However, if you plan to pay off this loan over a long period of time, you may end up in more debt than you expected.”

For most people, plastic surgery is not necessary. Therefore, instead of taking a loan, save up for this procedure.

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