7 Ways You Can Use Small Personal Loans to Make More Money
Most people assume the best way to make money is to get out of debt, save money, and make smart investments. While this is true in most cases, sometimes, the best way to boost how much cash-on-hand you have is to take out a small personal loan.
Loans don’t have to be these big, scary commitments that they’re typically made out to be. They can actually be one of the best financial tools you ever use if you understand how to make the most of them.
Here are 7 ways that small personal loans can actually put more money in your pocket rather than adding to your financial stress.
1. To Decrease Your Debt
Let this sink in: you can actually use more debt to better manage the amounts you currently owe. Small personal loans don’t snowball into more payments; they help you consolidate all of your payments into one easy to handle expense instead.
You can use a personal loan to pay off credit card debt, student loans, car payments, and more. They’re useful for everything from defaulted electric bills to paying for insurance premiums.
The key to making more money with them, though, is to bring down your interest rate. When you pay off a big chunk of your credit card debt or student loans, for example, you should be able to restructure your payments. This means you can settle all the late payments you have and maybe even work out a lower monthly payment to be paid for a longer period of time.
2. To Purchase Small Stocks
Maybe it’s not debt that’s holding you back from making more money, but the fact that you have a limited amount of money in savings. Not to worry, a small personal loan can give you just enough to start doing more with your money – like investing in small stocks.
Small stocks are usually those offered by new businesses who need startup money. They offer investors a low cost of entry and, possibly, a high reward. Be sure you do all your research on stocks before investing, though. The last thing you want is to take out a personal loan only to lose it on bad stocks!
3. To Invest in Tangible Assets
Don’t want to put your money into the hands of the stock market?
Consider investing in tangible assets instead. All you need is a little bit of extra money to buy a foreclosed house or shop for vintage furniture. These are just a few examples of assets you can buy, fix up, and flip for a profit.
Of course, it pays to know a thing or two about handiwork and to research the market you want to enter before getting started. You want to do most of the upgrades yourself in order to save money and gain as much profit as possible.
4. To Fix Your Home
Here’s an interesting thought: instead of going around fixing the aesthetics of low-cost homes, why not use a small personal loan to improve the value of your home?
It’s worth taking out a loan in order to install energy-efficient appliances or even just amp up the curb appeal of your property. Energy-efficient appliances allow you to save on things like water and electric bills; they basically pay for themselves in the long-run and leave you with a lot more savings than you might think.
Investing in a little more curb appeal, on the other hand, can give you a much higher home appraisal when you’re ready to sell the place in which you live.
5. To Open a New Credit Card
It may sound backward to open a new credit card with a personal loan, but just think about it for a second. If you used a personal loan to pay off the expenses on a new credit card, you wouldn’t have to worry as much about falling into debt.
Of course, you’d still have to pay off the loan. But, you’d be able to enjoy the sign-up bonus that comes with a new card which can range from a couple hundred dollars (or more!) to travel credits and other non-monetary bonuses.
You can also use this line of credit to build your credit score. Plus, you don’t have to worry about how a loan will affect your credit score if you take out one without a hard credit check. This page can tell you more about how this works.
6. To Start Your Own Business
Another way to make more money by taking out a personal loan is to start your own business. Whether your dream is to run a large corporate firm one day or you’d like to have a passion project on the side of your 9-5, a little loan can go a long way.
This may be the boost you need to finally start bringing your idea to life. Instead of holding off on your dreams and waiting for the “right time”, you can create the opportunity you’ve been looking for by applying for a small personal loan.
7. To Pay for Unexpected Emergency Costs
The final method to make more money with the help of a personal loan is to save more money. If you don’t have any form of savings, you probably need a small loan more than you think. You’ll be glad you have this extra cash when an emergency comes up like an unforeseen medical expense, a car repair, or a last-minute plane ticket to be with loved ones when they need you.
There’s no way of telling what life will throw at you. But, preparing for emergencies by putting away savings puts you in a much better position to deal with such situations as they come.
How to Compare Small Personal Loans
It’s one thing to understand everything that a small personal loan can do for your finances, and another to identify which loan agreement is right for you. Thankfully, you don’t have to figure this out alone!
Click here to discover everything you need to know about choosing between different small personal loans.