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Certain life events require more cash than we have on hand. It is easy to just grab a credit card, charge those expenses, and forget about them until it’s time to make a payment. Although sometimes more convenient, credit cards aren’t always the best answer. Depending on your credit rating and your needs, a personal loan can be the less expensive option.

If you need long-term option financing, you can likely get a lower interest rate and possibly higher limit with a personal loan than you would with a credit card. Here are a few instances in which a personal loan can be better than a credit card. (See also: Best Personal Loan Companies)

Weddings and Important Life Events

Because events like weddings and other big celebrations are not the types of purchases that benefit from rewards programs or the extra benefits that credit cards provide, you aren’t losing anything by using a personal loan to pay for them. You can choose the loan amount, based on your budget and according to the installments you can pay each month. Personal loans also allow a longer period to pay off the wedding expenses, at a lower interest rate than most credit cards offer. Companies like Promise Financial specialize in financing for life events.

Health Expenses

Whether you end up with a bill for an emergency visit or have unexpected medical expenses, unless you can pay the entire balance in full right away, it isn’t a good idea to charge it to a credit card. You can often qualify for much higher amounts with a personal loan than many credit cards will offer. In fact, personal loan providers such as Lending Club offer an exclusive Lending Club Patient Solutions loan specifically for medical expenses. Loans for as much as $ 50,000 are available with terms from 2 to 7 years, and interest rates as low as 3.99%. Lending Club Patient Solutions loans also offer a 0% promotional period for up to 24 months, in which you can save quite a bit of money if you pay your balance in full during that time.

Business Startup Expenses

Although a plethora of small business credit cards exist designed to reward business purchases, credit cards aren’t great for startup capital. Companies such as Kabbage specialize in small business loans and can help get your business going. Loans with Kabbage can be from $ 2,000 to $ 100,000 with fees ranging from 1% to 12% of the loan the first two months and 1% the remaining four months.

Debt Consolidation

If you have acquired an enormous amount of debt that includes credit card debt, there’s a good chance you won’t be able to consolidate it all with another credit card. Even if you get a credit card that offers a 0% introductory APR for balance transfers, you might not get a credit limit high enough. Using a balance transfer to pay off credit card debt only works if you can pay it all off within the promotional period. Otherwise it’s not worth it, because credit card APRs are generally very high.

An alternative option for consolidating large debts is personal loans. Loan providers such as Avant specialize in providing personal loans to consumers with bad credit that not only consolidate your debt but also help you build your credit in the process.

Home Improvement

Although there are credit cards for home improvement projects that award supplies and materials with special cash back and discount offers, many only award these purchases at certain times of the year and charge much higher interest rates. Store cards specific to home improvement may offer cash back and deferred interest. However, after the promotional period the APRs are very high. In addition to personal loans offering higher credit limits that are more likely to cover the costs of your home improvement project, interest rates are available with various lenders for as low as 3%.

personalloan – BingNews