Last updated on January 14th, 2023 at 05:06 am
When we set our goals for personal development, it's important to ask ourselves questions about what we want to accomplish or what we want to learn.
When these are clear, we can embark on our personal development journey as we have previously discussed in our post on how to Accelerate Your Personal Growth. This can be done with activities like reading, writing, or simply believing in ourselves.
When we believe in ourselves, we can take action. This also means that we do not have to become limited by logistical constraints such as time, distance, or even money.
And one of the best ways to achieve personal goals is through a little help financially. If you don't have the funds on hand one option to give yourself a boost is through taking out a personal loan.
Let’s take a closer look below.
related blog posts
What are personal loans?
A personal loan is the most versatile form of financing available. Here, you borrow a lump sum and pay it back in fixed installments without depositing collateral.
As of May 2022, the Federal Reserve reports that the average interest rate for a two-year personal loan is 8.73%. Yours could be even lower depending on the length of your loan term, your credit score, and your debt-to-income ratio.
This makes them a friendlier option for young dreamers. The amount that you can borrow is also versatile, which means that requesting small amounts of money between four and five figures is possible.
Sound Dollar’s guide to getting a small personal loan explains that you can also opt to seek out a community or cooperative bank or credit union. These tend to have easier requirements and lower interest rates than bigger banks so that even beginning professionals can seek out personal loans.
What can personal loans be used for?
Personal loans can be used for almost anything from funding large life expenses like a move or wedding to starting a business. Clever borrowers can use this personal finance as a way of investing in themselves mentally and physically.
This can mean using your small personal loan to cover the cost of a premium quality membership at a fitness club or a block of yoga sessions. This can also mean using the money to invest in new sets of business-friendly clothes to meet clients, go for interviews or give presentations that will pay for themselves quickly.
As a relatively low-risk investment, using a short-term personal loan to build a home office or purchase a new laptop means you can immediately make money from what you have purchased as opposed to spending it on the holidays or expensive meals.
What are the risks of using personal loans?
It is important to remember that using personal loans for development means that the money has to be an investment. That is, therefore, why it’s not recommended to use a personal loan to pay off student loans because this only means swapping one kind of debt for another.
CNBC explains that some personal loans cannot be used to pay college tuition despite education being one of the more popular goals for personal development. That’s because not every lender meets the requirements of providing private education loans.
Furthermore, it may be difficult to get another loan or open another credit card while on the terms of your personal loan. That’s because personal loans can affect your credit score. Investopedia outlines how your overall credit rating could be lowered temporarily as you have acquired additional debt. It will only return to normal or even improve if you repay the personal loan in a timely manner.
Does taking out a personal loan seem like a tactical step toward your goals? Make sure to do your own research beforehand to find the best deal for you.
You can also check out our other blogs on Crystal Clear Innovation for inspiration on successful personal development journeys.
Does taking out a personal loan seem like a tactical step toward your goals?
Make sure to do your own research beforehand to find the best deal for you.
You can also check out our other blogs for inspiration on successful personal development journeys.