Part of Admiral’s role as a lender is to lend responsibly. In turn, it’s your role to borrow responsibly borrowing only what you know you can afford and intend to repay, even if your circumstances change.
As with any big financial commitment you should always weigh up the pros and cons before you take out a loan.
When you’re applying for a personal loan one of the questions you’ll always be asked is ‘ What will you be using the money for’.. Our handy guide is packed full of examples of what you could use a loan for and some examples of what not to use a loan for.
There are a few things you could consider taking out a personal loan for.
Whether you’re buying new or used, you could pay for it with a personal loan.
This isn’t limited to construction projects like adding a conservatory or having a new kitchen fitted. You could use your loan to pay for any big-ticket item, like a new fridge-freezer, sofa or boiler.
As the average cost of a wedding creeps ever higher, you may consider covering the costs of at least some of your big day with a personal loan. Find out where people spend the most on weddings, and how you can cut the cost of your big day.
A debt consolidation loan brings all your debts together into one fixed monthly repayment. Depending on your circumstances, you could save money and/or pay off your debts sooner.
You should get free debt advice before you consider taking out a debt consolidation loan, as they’re not right for everyone. There charities such as Citizen's Advice can help.
Thinking beyond the practical improvements you can make to your home, you could borrow in order to buy a valuable item you want purely for pleasure. These items can go up in value, making them a worthwhile investment over time (although of course, they could lose value – so do your research). One thing, just remember to inform your contents insurer, it may be that the item needs to be declared in order to be covered.
So, we’ve covered what they can be used for, but what shouldn’t you consider using a personal loan for?
Starting your own business
If you’re planning on venturing into the world of business and need some capital to get things started, you may want to speak to your bank first about a business loan. You’ll need to put together a business plan and speak to a specialist about whether or not your idea is viable and therefore a worthwhile investment for a business loan with the bank.
Paying the deposit on a house purchase
If you’re trying to get on the housing ladder, getting the deposit together can be the hardest bit. That said, your mortgage provider will ask how you’re funding your deposit. If the cash has come from a loan or credit card, it may impact on the decision, especially as it will be an added outgoing that will have to be taken into account to assess your ability to repay the mortgage.
Instead, you should try to save whatever your monthly repayments would have been, and use this to fund the deposit instead.
Investing in stocks or shares
The stock market is volatile and can go up as well as down. If you’re thinking of borrowing to make a quick profit, remember this could just as easily leave you with a significant debt and not much to show for it.
Paying your household bills
If you’ve fallen behind with bills or rent, borrowing is just moving the problem from one place to another. If you are having financial problems, you can get free and impartial financial advice from someone like the Money Advice Service.
Find out more about personal loans or speak to a member of the team at Admiral today to find out more about personal loans.