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Woman using a laptop to determine the right time for her to get a personal loan

A personal loan, when used wisely, can help you overcome obstacles, seize opportunities, and achieve your financial goals. 

However, as with most financial decisions, timing matters. The best time to apply for a personal loan depends on your circumstances. However, there are some common situations when many people find loans are a good option to use.

This article can help you evaluate when to get a personal loan, so you can make an informed decision on your path to financial success.

What to Consider When Applying for a Personal Loan

When you're wondering if you should get a personal loan, start with an accurate picture of your financial situation. Here are some factors to take into account:

  • Interest rates: Personal loan interest rates tend to be substantially more affordable than the interest on credit card debt. However, specific interest rates can vary. It's important to consider your options and only take out a personal loan if you understand how the interest works and borrow at a rate you can afford. 
  • Your credit score: Having a good credit score makes it more likely you'll qualify for a personal loan. If you take out a loan, your credit score will be affected by how you handle the payments. Late or missed payments have a negative impact. However, making regular and timely payments on a personal loan can improve your credit score.
  • Commitment to regular payments: Make sure you can follow through with a schedule of regular payments to settle your debt. This will keep your credit score healthy and avoid the financial and legal repercussions of failing to pay.
  • Your work stability: Your ability to commit to keeping up with payments depends on the stability of your income. If you have a secure job or other reliable revenue stream, you have a good basis for staying on schedule with your payments. If your income is sufficient to afford repayment at the specified interest rate, you can consider taking the loan.

Once you've thought through your circumstances, considering the factors above, you'll be in a good position to judge whether you should get a loan right now. If you are confident that you'll be able to afford the interest and keep up with the payments, there are a few common situations in which applying for a personal loan can make a lot of sense.

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When to Get a Personal Loan

Here are some situations when a personal loan can be a good financial resource. In each case, we'll address why you may want to consider a loan and how it could help you. Remember that the best time to get a personal loan is when you clearly understand the need or goal it will serve and how you will repay it.

Apply For a Personal Loan Online

Accidents and Vehicle Repairs

Accidents are, by definition, unexpected. Having an emergency fund and a few essential forms of insurance coverage can help. However, road accidents and unforeseen repair needs can still leave you with extra costs exceeding the money you have on hand to address them.

Even with regular planned services, a car's parts may need repairing or replacing at any time. For example, a little radiator trouble can easily pass under the radar, leading to a blown engine on your way to work.

A personal loan can bridge the gap between the cash you have available and the costs of a reliable repair job to get you back on the road.

Medical Bills and Needs

Whether you need a screening, a prescription, or surgery, proper medical care is essential to living a good life and being there for those you love. However, medical costs can run high. Roughly 1 in 5 American households has medical bills it can't afford to pay. 

A loan could be a good option to help you or a dependant access urgent medical attention.

Home Repairs and Maintenance

Most of us have luxuries at home that we could delay replacing if we were short on cash. However, some repairs and replacements are more urgent. 

Home repairs such as fixing a leaky roof or a plumbing issue can result in costly bills, but they must be done. The best time to fix your roof is before the rain comes down. If it's already raining, the second best time is now!

Personal loans can help you afford expensive but essential work on your home. 

Debt Consolidation

From credit cards and car payments to student loans, many Americans are struggling to pay off two or more debts simultaneously. Servicing interest on multiple debts can feel overwhelming, especially if high-interest consumer debt is involved.

In some situations, taking out a personal loan to pay off your other debts can make sense, so you consolidate payments to one lender. This can reduce the overall amount you pay. 

Be sure to check your credit score and choose your lender carefully. The more favorable the personal loan interest rate is compared with your other debts, the more effective a debt consolidation strategy will be.

Improving Your Credit Score

A good credit score tells lenders they can trust you to repay what you borrow. 

With a good credit score, you become more eligible for future loans and will likely receive more favorable interest rates. With a bad credit score, you will have to pay higher interest rates to justify the risk the bank thinks it is taking by lending to you. If your score is too low, you may not be approved for loans or credit at all.

Taking out a personal loan can lower your credit score slightly because it requires a hard credit check. If you miss payments or pay late, your credit score will go down.

However, if you make your payments on time, a personal loan becomes a powerful credit-building tool. Keep in mind that your credit score is also affected by credit utilization, which is the portion of your available credit that you're using. Be sure to consider this, along with affordability, when deciding how much to apply for. You should get a loan you can afford that meets your needs while keeping credit utilization in check.

Taking out a personal loan when you can afford to repay it as planned is an excellent way to prove you are a responsible borrower. This boosts your credit score, unlocking better terms next time you get a loan.

You also may choose to visit one of our locations throughout Texas and Oklahoma. We have dozens of offices where our representatives are eager to aid you with any aspects of the application process or discuss repayment options. Remember, we tailor your repayment schedule to your budget. You can take from five to 12 months to pay us back for your loan, and you will see your credit score go up when you make on-time, consistent payments. 

So, if you need money to help with an unexpected issue, contact Atlas Credit today!

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Apply for a Personal Loan With Atlas Credit

Are you considering a personal loan to cover your expenses, consolidate your debt, or boost your credit score?

An affordable personal loan could be yours after a quick and easy online application with Atlas Credit. We respond quickly because we value your time and know you want funding sooner rather than later. But we also consider more than your credit score when checking that you qualify because we know you're more than a number. 

Whether you need urgent relief or a smarter solution to pay off debt and build credit, Atlas Credit is here to help. Apply online today, or find a location near you.

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