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Don't Avoid A Personal Loan Because of the Interest Rate
If you need a personal loan then then I highly recommend getting one as long as you can afford the monthly payment. It can help build trust with lenders if you make the payments on time and give you some extra cash when you need it.
Don't be scared of the high interest rates they charge because the overall amount of interest isn't that much. Usually the loan is only over 5 years and even with good credit mortgage lenders don't give out much more than $20,000 for a personal loan. So if you use a mortgage calculator and plug in the amount you want and the current interest rate then you see what your monthly payment will be and how much interest you'll pay over the length of the loan.
$20,000 over 5 years at 13% interest
Monthly Payment - $455
Total Interest - $7,303
Add $100 per month - Total Interest - $5,500
When I was younger I got a personal loan over a year for $2,000 just to buy a few things that I wanted. I also used my credit card every month for standard purchases that I was going to make anyways and paid it off at the end of each month. This creates a lot of trust with the bank that I'll pay off everything I owe so the next time I need a loan for a car, mortgage or even another personal loan they'll be more likely to give it to me. In other words, I have a good credit score.
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