Consider this option before submitting your loan application.
- There are consequences to going into debt, whatever the nature.
- Since side hustles are pretty easy to find these days, you might want to get one instead of borrowing money.
- By working in parallel, you can avoid higher interest rates, debt repayments, and a potential impact on your credit score.
If you need money, different options are available to you. You could borrow this money through a Personal loanor you could try working more and earning yourself, avoiding that debt.
Although there is talk of an imminent recession which could push up unemployment levels in the United States, right now the job market is still strong. And that extends to the gig economy.
In fact, now is a good time to start watching a side hustle if you need to increase your cash reserves. With the holidays approaching, we can bet that many companies will need more seasonal workers. And that means you may have an easier time finding work that you can do in addition to your main job.
Of course, since personal loans tend to offer competitive interest rates, you might be more inclined to apply for one rather than bother finding a side hustle – and getting time into your schedule. to do it. work. But here’s why a sideways scramble really is a better bet right now.
1. Borrowing rates are higher these days
The Federal Reserve raised interest rates in an effort to slow inflation. But it made borrowing more expensive across the board. Everything from car loans to mortgages to personal loans are costing more due to higher interest rates, so now is just not the time to borrow if there is a way to. to avoid.
2. You won’t have to factor debt repayments into your budget
Owing money in any form can be overwhelming and frustrating. If you take out a personal loan, you will need to factor these payments into your budget and track them month after month until your debt is paid off. If you avoid a personal loan and use side hustle to get the money you need, you won’t have to deal with those debt repayments – and the stress they might cause.
3. You will avoid a serious investigation into your credit file
Each time you apply for a loan, an in-depth investigation is carried out on your credit file. And just one serious request could knock your credit score down a few points.
If you have a credit score of, say, 780, that’s okay. But if your credit is weak to begin with, even a minor hit could have consequences, such as preventing you from qualifying for another type of loan, such as a mortgage, when you need it. If you use a secondary hustle to increase your cash reserves and avoid a personal loan, you will avoid this difficult investigation.
Don’t rush into a personal loan
A personal loan can be a great way to borrow money when you need it. But if you have the option of just earning the money you need instead, you might want to take it – especially now, given that borrowing has generally become expensive, even for loan seekers who have fantastic credit.
The Ascent’s Best Personal Loans for 2022
Our team of independent experts have pored over the fine print to find the select personal loans that offer competitive rates and low fees. Start by reviewing The Ascent’s best personal loans for 2022.