Personal loans can help fill the gap while you wait for coronavirus relief. (iStock)
As the COVID-19 pandemic continues to affect the financial well-being of millions of Americans, Congress reached agreement on a new coronavirus stimulus package. On December 27, President Trump signed a $ 900 billion federal aid package that included a second round of stimulus checks.
The package offers up to $ 600 for qualified single contributors and up to $ 1,200 for couples who file a joint statement. An additional $ 500 is paid for each dependent child. The federal relief bill extends the moratorium on rental evictions until January 31, although it does not extend indulgence for federal student loan debt that also expires in late January.
Now, under the Biden government, Congress may consider a plan to send another $ 1,400 stimulus check – but that amount is not guaranteed. If you need more money and want it now, there is an easy option: personal loans.
How to make money fast
If you are struggling financially because of the coronavirus pandemic, taking out personal loans may be a better alternative than using credit cards to cover everyday expenses. Here is a more detailed look at how a personal loan can help you stay afloat during COVID-19.
Personal loans offer flexibility, as you can use them for a variety of expenses. During the coronavirus pandemic, this can mean daily expenses, such as utility bills, rent or groceries.
You can visit Credible today to quickly compare rates and terms for personal loans ranging from $ 1,000 to $ 100,000 and find a lender that meets your needs in minutes.
You can also use a personal loan to finance emergency expenses, such as medical bills or a major car repair, when your emergency fund is exhausted. Technically, you can even use personal loan proceeds to track mortgage or student loan payments, if needed.
With student debt, it may be best to explore the options for tolerating, postponing or refinancing student loans first, if you have difficulty managing payments. If you need relief for student loans, in particular, and do not qualify for federal benefits, you can refinance your student loans via Credible. Credible can help you compare rates and find a lender that best meets your needs.
WHY SHOULD YOU USE A PERSONAL LOAN?
Why is a personal loan a better option than a credit card?
A credit card can be a convenient way to pay for things, while earning rewards for purchases. But there are some disadvantages:
- Paying off credit card debt can be challenging if you have a high variable interest rate
- Carrying a significant amount of outstanding debt in relation to your credit limits can negatively impact your credit score
- Late payment of an account can trigger late fees and lead to negative items in your credit history, which again can hurt your FICO score
Having to pay credit card debts can also make it a challenge to achieve your personal finance goals. If a considerable amount of your income goes to paying off debts each month, you will have less money to save or simply prepay your bills.
Personal loans can offer a lower fixed interest rate if you have a good credit history and a good credit score. And monthly payments are predictable, facilitating the budget to settle the debt. Learn more about personal benefits via Credible.
Can I use a personal loan to consolidate debts?
If one of your financial goals is to get out of debt, personal loans can help. A debt consolidation loan allows you to combine multiple debts into one, with a single monthly payment. You can use a personal loan to pay off debts, including credit cards, loans and other lines of credit.
Debt consolidation can also help you pay off debt more quickly if you can guarantee a low fixed interest rate. And when you stop having multiple monthly debt payments for just one, your budget can become less stressful.
If you decide that debt consolidation is the right step, it is important to research the best type of personal loan, rates and terms. Fortunately, Credible makes it easy to compare loan rates and companies.
SHOULD YOU GET A PERSONAL LOAN TO PAY THE CREDIT CARD DEBT?
How much personal loan should you take?
If you are considering personal loans to manage debt during the coronavirus pandemic or just to cover your daily bills, it is important to consider how much money you can realistically borrow.
Taking out a very large personal loan means more debt to pay. But taking out a very small loan can leave you with a financing gap to close. Using a personal loan calculator can give you an idea of the type of monthly payments you can expect. Visit Credible to find the best personal loan rates.
HOW TO INCREASE YOUR CHANCE TO GET PERSONAL LOAN APPROVAL
What are some other ways to stretch my budget?
Another coronavirus stimulus package may be underway under Biden’s administration. In the meantime, you can stretch your budget as follows:
- Cutting all non-essential expenses
- Take advantage of student loan relief options, including tolerance, postponement or refinancing of student loans
- Seek help through government-sponsored programs, such as SNAP or LIHEAP
- Exploring secondary ideas and other options to increase revenue
If you have experienced these things and still need some financial relief, consider purchasing a personal loan. You can visit Credible to compare interest rates and loan options from several lenders. Credible’s experienced credit agents are available to help answer all your questions about personal loans.
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