Personal loans can increase your buying power. In the long run, taking out a loan can actually save money and may even help you secure additional credit in the future. Below are a few situations in which taking out a personal loan can be a wise financial move.

1. You’re Consolidating Debt

Credit cards and other consumer lending products typically have extremely high interest rates, especially if your credit rating is on the lower side. Taking out a personal loan to pay off credit cards simplifies your bill-paying process and could save you hundreds of dollars in interest. In some circumstances, using a personal loan to refinance student debt can be a smart financial move, especially if your current interest rates are high.

2. You Have a Financial Emergency

Auto breakdowns and home repairs can cost thousands of dollars, which is more than many families can afford out of pocket. A personal loan can provide the resources to deal with financial emergencies, usually at substantially lower rates than credit cards. If you’re making a major purchase or funding a large event, borrowing from a credit union can be more affordable than financing through the seller as well.

3. You’re Rebuilding Credit

Establishing a reputable credit history means showing lenders you know how to manage debt responsibly. Taking out a small personal loan and making every payment on time will bring up your credit score, making it easier to qualify for lower-interest lending products in the future.

With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial FCU is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services, follow us on Facebook, Twitter, and Instagram for news and updates, or call (808) 832-3700 on Oahu or toll-free at (800) 272-5255 with any questions.