5 ways a personal loan can work for you

How to use this flexible loan to cover a variety of situations

A simple math problem for consumers: You have fallen in love with a patio furniture set. Which method of payment adds up to more?

• Putting the set on your credit card and paying 16% interest over the next year.
• Getting a personal loan to buy the patio furniture and pay off your credit card, at closer to 6% interest.

The solution appears simple. Yet many don’t realize that a personal loan can simply and manageably cover a range of everyday needs, from home improvement to unexpected bills, as well as to help realize life’s bigger dreams.

Every year, First Financial helps our clients pursue $34.8 million in flexible solutions, through one of our many personal loan options. Chances are, some of your needs apply.

Personal loans have come a long way, and they go a long way

First off, a personal loan does not necessarily require days and days of preparation and processing. Clients can apply for many of our loans on our website. Here are five of the common needs personal loans cover.

Refinancing credit debt – Americans paid down nearly $83 billion in credit card debt in 2020, but some experts predict a spending surge in 2021,¹ with average credit card rates nudging above 16%.² For those who want to get out from under heavy rates, our Credit Achiever Loan might make sense. It helps borrowers shore up their credit history while saving, because it uses an interest-bearing savings account as loan collateral.

Debt consolidation – This strategy enables borrowers to combine several forms of debt and replace them with one loan. Because this option both reduces rate-related expenses and simplifies repayment schedules, it’s popular – 38% of consumers who sought personal loans in early 2020 were consolidating debt.³ In addition, we offer additional loan rate discounts to relationship-based account holders.

Covering unplanned expenses – New braces, a child’s first car, a broken furnace. As much as we plan, unpredicted expenses will likely find us. With our f1RST Quick Loans, borrowers can access as much as they need up to their credit limit (maximum $25,000) for six months. This may be why 2,400 clients rely on our f1RST Quick Loans to get through life’s pricier surprises.

Home improvements – Nearly half of all millennials who purchased homes during the pandemic planned to invest $50,000 or more in renovations, and 46% were over budget in the first year.⁴ For such bigger needs, borrowers might benefit from our Savings Secured Loan. It uses a savings account, investment accounts, or certificates of deposit as collateral for the money borrowed, up to $500,000. The interest rates are below those of unsecured loans and could improve credit.

An everyday cushion. Homeowners seeking a little extra money for everyday needs (like a patio set) might find an easy-access solution in a home equity line of credit (HELOC). A HELOC uses the difference between the home’s value and its mortgage balance – its equity – as collateral, translating to competitive interest rates. Borrowers don’t have to use the same lender that underwrote their mortgage, but will have to have accumulated at least 20% equity in the home.

From new furniture to new debt, life throws a lot of choices at us. Choose the options that provide you the greatest flexibility and ease, so you can enjoy your investments.

To find a personal loan or line of credit that's right for you, visit our personal loan page or our HELOC page.

1 “Americans paid off a record $83 billion in credit card debt in 2020,” by Jessica Dickler, CNBC.com, March 8, 2021, https://www.cnbc.com/2021/03/08/americans-paid-off-a-record-83-billion-in-credit-card-debt-in-2020.html

2 “Average Credit Card Interest Rates: Week of May 19, 2021,” by Kelly Dilworth, CreditCards.com, May 19, 2021, https://www.creditcards.com/credit-card-news/rate-report/

3 "Most people get personal loans for debt consolidation—here’s the average amount,” by Megan DeMatteo, CNBC.com, Dec. 23, 2020, https://www.cnbc.com/select/average-personal-loan-amount-for-debt-consolidation/

4 “New Millennial Homeowners Spend Big on Renovations and Repairs During Pandemic, According to Angi Survey,” Press Release, Angi, May 19, 2021; https://ir.angi.com/news-releases/news-release-details/new-millennial-homeowners-spend-big-renovations-and-repairs

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