 TITLE: If I Get Approved for a Personal Loan, Do I Need to Accept It? CONTENT: What to Consider Before Applying for a Personal Loan\n----------------------------------------------------\nPersonal loans are a big financial commitment and can often take years to repay, so it's important to understand both the benefits and the drawbacks before you apply for one.\n### Pros of Getting a Personal Loan\nThere are a few situations where a personal loan may be a better option than other available credit options, and here's why:\n*   **They can help you eliminate credit card debt.** If you can qualify for a personal loan with a lower interest rate than what you're paying on your credit cards, the loan can help you consolidate your credit card debt and save money as you pay it off. Moving your credit card debt over to a personal loan will also reduce your credit utilization rate, which can help improve your credit score.\n*   **They're often unsecured.** Many personal loans don't require collateral to get approved. If you're doing home improvements, for instance, a home equity loan or line of credit may be cheaper than a personal loan, but you risk losing your home if you can't repay the debt.\n*   **They can fund quickly.** If you need money fast to cover emergency expenses, some personal lenders can provide funds as early as the next day, or at least within the week.\n### Cons of Getting a Personal Loan\nWhile there are some clear advantages to using a personal loan in some situations, it's not always the best option available. Here are some reasons why:\n*   **They can be expensive.** It's possible to find personal loans with interest rates in the single digits, but the average rate on a two-year personal loan is 10.63%, according to the Federal Reserve. If you need a longer repayment term or your credit is less than perfect, you may end up with a rate that's much higher. Some of the most popular personal lenders charge rates upwards of 30% with some borrowers. In addition to a high interest rate, you may also be on the hook for an origination fee, which can be as high as 8% among top lenders.\n*   **They can have short repayment terms.** Depending on the lender you choose, you may only have a few years to repay the debt you've incurred. If you're looking to fund a large purchase, such as a new car or a home improvement project, a short repayment term could make the monthly payments unaffordable.\n*   **They may be unnecessary.** With most personal loans, you can use your funds for just about anything. But just because you can take out a personal loan for a vacation, college costs or a big-ticket item you don't need, it doesn't mean you should. In situations like these, it may be a better financial decision to save up for the purchase or use a different type of loan, such as student loans, that may be a better fit. END