If you instantly think that taking out a personal loan is a bad idea, ask yourself what you would be using it for. Personal loans in Canada don’t have to be a bad thing; there are many good, legitimate reasons to take out a personal loan. Of course you would want to choose a credit limit, interest rate and payment plan that works for you; what you can afford will all depend on your credit score as it is.
Strengthen Credit
Speaking of your credit score, a personal loan can actually help you build yours. The oldest and most regularly-paid lines of credit look the best on your credit score, so steadily paying off a personal loan over time can help you in the long run. Your credit will take a small hit initially, but you will be shocked at how quickly it rebuilds and strengthens itself.
Emergencies
We’ve all had that day from hell where something massive happens: A pipe burst in the basement, the car was sideswiped or a fallen tree branch went through the window. Life happens, and dishing out thousands of dollars out-of-pocket is not a reality for everyone. Personal loans can help cushion the blow in case something in your life goes awry.
Home renovations
Repairs can become costly when left unfixed for too long, so if you need to take care of something like a crumbling foundation or a sagging roof, you might reconsider that personal loan. Is your house becoming a hazard to live in? Yes, you will be making monthly payments, but those are worth having a safe, comfortable home.
When used responsibly, personal loans don’t have to be instantly labeled as a bad thing. They can help you in many ways and can serve as a buffer between that rock and a hard place.