GOBankingRates works with many financial advertisers to showcase their products and services to our audiences.
These brands compensate us to advertise their products in ads across our site.
This compensation may impact how and where products appear on this site.
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information.
it’s possible for you to read more about oureditorial guidelinesand our products and servicesreview methodology.
However, taking out a loan doesnt always mean you need the money.
Here are three reasons whyyou might consider taking out a loaneven if you dont need the money today.
Unfortunately, this can be a roadblock for many people.
Many people choose to start building credit by taking out astarter credit card.
However, youre not going to use the loan.
So how does this work?
Youd start by applying for a small personal loan of a few thousand dollars.
From there, youll set upautomatic monthly paymentsfor the next 12 months so you never miss a due date.
Because you dont have much of a credit history, your interest rate will be a little higher.
It helps them avoid getting into debt and helps build credit for the future.
You Need It for a Rainy Day
Unexpected expenses can pop up at any time.
This is even more true if youre a homeowner.
Most people turn to credit cards at this point.
HELOCs provide homeowners with a line of credit they can use at any time.
Knowing you have the money available if needed can provide you with peace of mind.
Most online investment brokersgive experienced investors the ability to trade on margin.
Unfortunately, margin rates with most brokers can be 10% or more and leave you with significant risk.
Another option is to leverage ahome equity loanor HELOC.
This means you should only use a loan to invest if youre experienced and willing to take the risk.
The Bottom Line
Many people take out loans because they need the money.
More From GOBankingRates
Share This Article:
