How to use a personal loan as a money management tool

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Personal Finance

Team MONEYME|25 July 2024| 2-minutes read

When you think about personal loans, you probably think about major purchases – from new cars to big renovations. 

But did you know that an unsecured personal loan can be used for just about anything?  

That includes consolidating debts or meeting other substantial expenses, such as fees for study required to upskill or health-related expenses. 

While a personal loan can give you a lump sum to achieve a significant goal, you can also think of it as a tool that helps you manage your money better. 

Consolidating your debts 

Repaying debts can complicate your finances – especially if you’ve more than one debt. This means dealing with multiple interest rates, repayment amounts and monthly deadlines.  

One way to streamline is consolidating your debts – in other words, merging them together into a single personal loan. That way, you can budget better because you have just one repayment deadline to meet each month. Plus, it’s often possible to find a lower interest rate.  

Learn more about debt consolidation on this page. 

Refinancing an existing loan 

If you’re paying off a loan, your circumstances might have changed since you first took out that loan. You could have a new job, a higher credit score, or different goals. You might want to consider refinancing to a loan that better suits your needs. 

Refinancing (taking out a new loan to pay off an existing loan or credit card) could unlock a lower interest rate and reduce the overall interest cost. You could also lower your monthly repayments through lower interest rates or extending your loan term, helping to relieve financial pressure or free up extra cash. 

Refinancing can give you the flexibility to choose a loan term that works for your current needs. If this might be for you, check our refinancing guide to learn more. 

Spending money to make money

If you have a career goal that requires further study or a course, you could be looking at some hefty expenses like tuition fees and textbooks.

A personal loan can give you an opportunity to upskill now, without having to save up the full amount, and fast track your career in the process. Especially if significant discounts are offered for upfront payments.

You could also use a personal loan to kick start a small business idea.

Meeting unexpected expenses

If the unexpected happens and you suddenly have a large expense that you don’t have the savings for, like car repairs or medical expenses, a personal loan could be a good idea.  With a personal loan you can meet your expenses upfront, then repay them at a pace that suits you.

If you borrow with MONEYME, you get to choose from a variety of repayment plans. Opt for a loan period and monthly repayment amount that works for your budget and lifestyle.

Could a personal loan be right for you?

Whether you’re looking to consolidate your debts, refinance an existing loan, upskill or pay for unexpected expenses, it might be worth considering a personal loan.  

Find out more about applying over here.