4 Situations Where a Personal Loan Can Pay For Itself

If you can leverage a personal loan the right way, it can practically pay for itself. Even better, help you earn money. Savvy businesses use it, why can’t you?

Contents

You Need to Make Home Improvements You Want to Lower Home Maintenance Costs You Want to Change Careers You’re Accelerating Your Debt-Free Journey

Read More: 6 Wealth-Destroying Mistakes People Make Every Day Without Knowing It

Find Out: 6 Subtly Genius Moves All Wealthy People Make With Their Money

While too much debt can have severe consequences, if you find yourself in these four situations and are responsible for making on-time payments, then a loan could be your best financial ally.

Trending Now: Suze Orman’s Secret to a Wealthy Retirement–Have You Made This Money Move?

You Need to Make Home Improvements

Maybe your roof has seen better days, or you finally have time to plan out the much needed renovation to your bathroom that hasn’t been updated in decades.

Using a personal loan for home improvement projects can be a catalyst for growing your wealth if it increases our home’s market value. For example, Zillow found that replacing siding, windows and smaller improvements like landscaping projects helps to increase the value of a home.

If you’re thinking about selling your home soon, using a personal loan could help you with a bigger profit on closing day. Even if not, a higher home value translates into higher net worth.

You Want to Lower Home Maintenance Costs

Making changes around your home can also benefit you now even if you don’t plan on moving for a long time. For example, installing solar panels, upgrading windows to more energy efficient ones, and even replacing an inefficient HVAC system could lower your home maintenance costs.

Plus, you may be able to qualify for certain tax credits and incentives, helping you save even more. There are federal credits, for example, that offer up to $3,200 in tax credits for making certain clean energy upgrades.

Check with your state and municipality to see what other incentives are available.

You Want to Change Careers

Investing in yourself almost always results in a higher potential for earnings and advancing in your career. Taking out a loan for professional development can net you a high return on your investment, as long as you know it’ll directly result in a career boost.

Say you’re currently a bookkeeper and wanted to move up within the accounting firm you’re working at. Your boss is willing to give you a shot at being a CPA, so you take the time to study for the CPA exam and work under a licensed CPA.

Considering the median salary for those working as accountants is $81,680 according to Bureau of Labor Statistics data, that could be a big jump from where you were before.

Even if you did end up taking a personal loan the increase in salary would more than offset what you borrowed.

You’re Accelerating Your Debt-Free Journey

Becoming debt-free (or at the very least, owing less to the banks) is a worthwhile investment. While it sounds a bit paradoxical, you can use debt to accelerate your debt-free journey, by using a consolidation loan.

This type of loan is where you take out a new loan and the proceeds are used to pay off existing high-interest debt. Ideally, the new loan offers a lower interest rate, so you save money. Or, it offers a lower monthly payment so that you can use the extra funds towards other goals like investing for retirement.

Any of these benefits can improve your financial situation long-term.

More From GOBankingRates