Signature loans can be used to cover all sorts of summer expenses like vacations or home renovations. Here’s how you can use a signature loan to achieve your financial goals this summer.
What is a signature loan?
A signature loan is an unsecured loan that allows you to borrow money in a single lump sum. An unsecured loan means you’re not required to provide collateral, like a house or car. Instead of being backed by collateral, a signature loan is simply backed by your signature which represents your legal promise to pay back the amount borrowed.
When you apply for a signature loan, your credit score and income will help determine your interest rate and loan amount. Most signature loan interest rates are lower than credit card interest rates. You’ll repay the loan amount, in addition to interest, over a certain period of time typically ranging from 24 to 60 months. You can use a signature loan to fund whatever you need.
How to use a signature loan
A signature loan can be useful when certain expenses come up. As you’re gearing up for summer, consider if a signature loan could help you reach any of the following financial goals.
Vacation
We all need a chance to get away and relax, but sometimes our financial situation doesn’t allow it. Vacations can be pricey, but with the help of a signature loan you can pay for things like plane tickets, rental cars, hotel reservations or whatever you need for your trip.
Large Party or Event
If you’re planning any large parties or events this summer, like a wedding, graduation or big birthday party, expenses can add up quickly. Rather than draining your savings or charging expenses on high-interest credit cards, try a signature loan instead. You’ll more than likely get a lower interest rate than a credit card which will help you save money.
Home repairs
Using a signature loan to fund home repairs is a good way to get cash fast. If you’re needing plumbing repairs or to fix a broken water heater, more than likely you need these types of things fixed as soon as possible.
If you don’t have the funds on hand, a signature loan is a quick way to get the cash you need to make your home repairs as soon as possible.
Emergencies
If you’re able to afford it, creating an emergency fund is a good idea. An emergency fund is designed to fund larger, unexpected expenses like your car breaking down or a medical expense. It should give you enough financial support to keep you afloat during a financial emergency.
Ideally, an emergency fund should have three to six months’ worth of living expenses. If you can’t afford to save this much, a signature loan may be a good option to help out during a financial emergency.
Consolidate debt
If you have high-interest credit card debt, you can use a signature loan to consolidate that debt into one monthly payment. This is beneficial if you’re able to lower your interest rate because you’ll end up paying less in interest which will save you money over time.
Use our debt consolidation calculator to determine if debt consolidation could lower your monthly payment and reduce the amount of interest you’ll pay.
A signature loan can be beneficial for many reasons, especially when helping to fund your summer expenses. It’s a financially smart way to achieve your summer goals.
