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How A Personal Loan Can Help You Create A Budget—and Increase Savings!

by Magical Credit

It’s understandable to feel nervous about borrowing money. Whether it’s your first time or just a bad time, you worry about stretching your income even thinner—and what about your other expenses? Sure, you earn just enough every month to qualify for a personal loan, except the banks tell you that you aren’t worth the risk.

But you know you are.

It’s time to start believing in yourself. Whether you’re a low-income earner, collecting a government subsidy or pension, or you just need a little extra cash—a personal loan can buoy your finances by spreading costs over the long term so you have time to breathe. Buy that car you’ve been eyeing; take a trip for some much-needed “me time”; get yourself or a loved one out of debt—and still have enough afterwards without struggling to stay afloat. Personal loans give you the flexibility to create a budget that builds savings at the same time.

how personal loans help you budget

Life is all about options, and here are few ways personal loans provide them.

#1 Personal Loans Take The Pain Out Of Budgeting

You put off that dental appointment long enough, and finally your dentist asks you, “Are you sure you’re flossing properly?”

To some, creating a budget can conjure the same cringing feeling.

You’re certain you have kept up on your bills (right?), but until now, have you actually tracked your expenses to see how they match up with your income? It might be worth a hard, honest look, since ranking expenses from most important to least important can help you prioritize.

A personal loan can also give you that extra push to structure your expenses into a budget. Knowledge is power! Instead of putting off the inevitable, you’ll know with confidence when payments are due and that you can make them. Consider creating a schedule to take the guesswork out of what you’ll owe over the length of the loan, what you’ll have left for groceries or rent, and more importantly, how much you can give back to yourself every month! Take pride in your good financial hygiene—you’ve earned it as you work to pay off your debt.

#2 Don’t Create A Budget Just To Pay Off Your Debt. Set Goals

Whether small or simple, realistic goals build confidence—and your savings! A personal loan gives you the resources to flex your budget enough that you can save for long-term goals, such as debt freedom, a vacation, a new car, or even just to have money in the bank. What matters most is planning, and creating a budget is your blueprint to take control of your finances. If you aren't sure where to begin, let the percentages do the talking: trimming your expenses to unlock savings—in groceries, clothing, entertainment—can help you do less rather than going without entirely.

Life is about living, so balance is the key to achieving the goals you budget for. Ask yourself: are your spending habits aligning with your plans? Can you adjust and tweak your limits to focus more on some goals than others? And can you accomplish your goals sooner? In the end, a personal loan only eases a tight budget; it’s up to you to create one not just for a complete picture of your monthly expenses—but also to gaze, with confidence, upon your future.

#3 Budgeting Can Put Your Personal Loan To Work For You

Let’s face it, budgeting takes guts—but once you’ve found a loan that works for you, creating one around your repayment schedule can lend an important framework to set your goals on paper (or electronically). Start by sorting your needs from your wants.

Comparison shop for the best auto insurance rates, for example. Stick to your grocery list to avoid unnecessary or frugal purchases. Limit spending on birthday and Christmas gifts—sometimes, a single gift says more if it’s meaningful. Contact your bank to allow automatic deposits transferring five, ten, even twenty dollars a week to an account you don’t use. After a year, you’ll have saved up to $1000!

Most important of all, keep track of your expenses and balances.

If you haven’t considered consolidating your high-interest debts into one simple, low-interest personal loan, you should. Magical Credit offers a wide range of practical loan options for applicants who want to take control of their finances once and for all. Get started today.

Loan Example

Term
1 Year
APR
56.50%
Amount
$2,000.00
Fees
$194.00
Interest Rate (46.8%)
$936.00
Total Cost of Borrowing
$1,130.00
Total Due End of Term
$3,130.00
NOTE: You can pay off your loan at any time with no penalty. You will only pay interest up to the date you borrow it.

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