3 Times never to use a personal loan

Last post: Jan 4, 2018

Secured personal loans can provide a lifeline to responsible individuals with emergency financial needs. However, these products aren’t suitable for everyone in every context...

 While secured personal loans offer a flexible, accessible source of finance to consumers with urgent financial needs and the assets to responsibly secure a loan, no financial product is suitable for all-comers. In fact, there are some situations in which making use of a personal loan is a downright dreadful idea.

We lend responsibly to individuals seeking fast, flexible finance who meet our very important affordability criteria. Whether they've been hit with an unexpected veterinary bill or need to repair their car pronto in order to get to work, our personal financial products are a great fit for all sorts of clients. However, we also turn down many applicants when products are quite simply unsuitable for their circumstances.

Here are three times you should never take on a personal loan...

1. When you don't know how you will meet repayments
Hope and prayers are all very well, but if you don't have a concrete repayment plan in place, you should never ever take on a personal loan. Failure to meet repayments is likely to result in a debt spiral which will significantly worsen your financial situation.

2. If your employment situation is uncertain
Whether your contract is set to expire during your loan period, you undertake intermittent, informal work or you're currently on probation, it's unwise to take on a loan if your employment situation is unstable. A dip in income could seriously affect your ability to make repayments.

3. When you want to fund "frivolous" expenses
In need of a getaway? Dying to get your hands on the new iPhone? This is not the time to take on a personal loan. Personal loans should only be used for pressing, essential expenses. Non-essential purchases should be saved for to avoid incurring interest.

Do you need a fast, flexible secured loan to cover a crucial expense? Find out more about how personal secured loans work and talk to our finance experts today.