3 Reasons to Use Side Hustle to Avoid Personal Loans

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Consider this option before submitting your loan application.

Key Point

  • Taking on any kind of debt has consequences.
  • Side hustle is fairly easy to come by these days, so instead of borrowing money you might want to get a side job.
  • Having a side job can help you avoid rising interest rates, paying off debt, and potential hits to your credit score.

If you need money, you have many options.you have that money personal loanor you can avoid that debt by working more and trying to earn your own.

I have a pressing story recession That could push up the US unemployment rate, but right now the labor market is still doing well. And that extends to the gig economy as well.

In fact, now side hustle If you need to increase your cash on hand. With the holiday season approaching, there is no doubt that many businesses will be in need of seasonal workers. In other words, it will be easier to find a job that you can do in addition to your main job.

Of course, given that personal loans tend to offer competitive interest rates, rather than going through the hassle of finding a side hustle and having to schedule time to actually do it, simply apply for it. may tend to work. But here’s why a side hustle is really a better bet right now.

1. Borrowing interest rates are getting higher these days

The Federal Reserve has been raising interest rates to keep inflation down. But that makes borrowing more expensive overall. Everything from car loans to mortgages to personal loans has become more costly due to rising interest rates, so if there’s a way around it, now isn’t the best time to borrow.

2. You don’t have to budget for debt payments

Borrowing money in any form can be upsetting and frustrating. If you take out a personal loan, you should factor those payments into your budget and keep them monthly until the debt is paid off. By avoiding personal loans and using a side business to get the money you need, you won’t have to deal with debt payments and the stress it can cause.

3. You can avoid harsh scrutiny on your credit report

Whenever you apply for a loan, a rigorous scrutiny is done on your credit report. And just one tough question can drop your credit score by a few points.

For example, if your credit score is 780, it doesn’t really matter. But if your credit is poor to begin with, even the slightest blow can have consequences such as not being able to qualify for another type of loan. mortgage, when you need it. Using a side hustle to increase your cash reserves and avoid personal loans can help you avoid that tough question.

Don’t rush personal loans

Personal loans are a good way to borrow money when you need it. But if you have the option of earning only the money you need instead, you might want to take it. Especially given that even loan applicants with excellent credit generally borrow more money.

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