Before we get started, there’s one thing you must remember — no two people are in the same financial situation. What works for one person, may not work for you. It’s important to research your options (or meet with a Financial Advisor). Opening a personal loan is a commitment. We’ll help you find out if it’s right for you.
What Makes a Personal Loan Useful
The benefit of a personal loan is in its simplicity and versatility. It’s a specific amount of money, for a set term, at a fixed rate. You know your payment amount and how many payments need to be made. And you can use it for nearly anything.
One of the best things about Connexus Personal Loans are the low rates. The average personal loan in the U.S. in 2018 ranges from 10.3% to 12.5% APR1 if you have an excellent credit score. The lowest available rate at Connexus is 8.99% APR2, and during promotional periods it gets even lower! See our current rates.
What People Use Personal Loans For
Personal loans are more common than you may think. Here are the top three reasons people opened personals loans in 2017:
1. Debt Consolidation
The average U.S. household that has debt, has $133,568 of it3. Most of those households have multiple forms of debt (credit card, auto loan, student loan, etc.). Instead of making monthly payments for each form of debt, they take out a personal loan to pay off the other debts. That way, they only have to make one payment. This works best when the personal loan has a low interest rate.
2. Household Expenses
Let’s say you need new furniture and appliances. If you can’t comfortably pay for it all at once, a personal loan is a great way to get the money you need. You could pay for it with a credit card, but they have high interest rates. Being stuck at a high rate means your credit card debt can build fast. Personal loans have lower rates.
3. Medical Expenses
This is similar to reason No. 2. Medical bills (ongoing or unexpected) are typically expensive. If you can’t comfortably pay for it right away, a personal loan may be one of your best options. Paying off your bills at a low rate could help you save money in the long run.
While those are the top three reasons, personal loans are also popular for moving expenses, weddings, vacations, and more.
The Common Alternative: Credit Cards
The most common alternative to a personal loan is a credit card. They’re different types of products, but they’re often compared against each other.
Credit cards are great for small purchases and rewards points, but they have to be used wisely. If you can’t pay off your balance right away, it’s risky. Why? Because the national average credit card rate is 16.62% APR4. When you get buried in that kind of debt, it’s hard to get out. If you have a large purchase coming soon or debt that can be consolidated, a personal loan is a better option than a credit card.
Is a Personal Loan Right For You?
If you’re ready to get started, all you have to do is apply online. Still not sure? Visit our Personal Loans page or call 800.845.5025 to speak with one of our lending experts about whether a personal loan could help you.
1 Average personal loan interest rate based on “Average Personal Loan Interest Rates for 2018” article on www.ValuePenguin.com (https://www.valuepenguin.com/personal-loans/average-personal-loan-interest-rates).
2 APR = Annual Percentage Rate. 8.99% APR is our lowest available rate as of 4/10/2018. Borrow $10,000 at 8.99% APR for 60 monthly payments of $207.54 or $20.75 per $1,000 borrowed. Minimum loan amount $2,500. Maximum loan amount $20,000. Rate includes all available discounts. Other loan rates and terms available. Loan subject to approval and qualifications. Rate may vary on individual credit terms and relationship level. Certain restrictions may apply. Not valid on tuition expenses and interest is not tax deductible. Does not apply to loans currently financed with Connexus Credit Union. Rates subject to change.
3 Average American household debt number based on the “2017 American Household Credit Card Debt Study” done by NerdWallet on www.NerdWallet.com (https://www.nerdwallet.com/blog/average-credit-card-debt-household/).
4 APR = Annual Percentage Rate. The national average credit card rate was 16.62% APR as of 4/6/18 according to www.creditcards.com.