March 29, 2021

Personal Line of Credit: The Rainy Day Fund When You Need It

Sometimes life throws expensive surprises. To cover them, you may need to borrow. If you’re borrowing to finance a costly event, consider a personal line of credit. Here are some ways to use a PLOC:
1.) Government Shutdown
 
If the government ever shuts down, the Credit Union is here for you. If you have a personal line of credit set up, you will have some security built in. You only have to pay for what is used, so if its a short shutdown you don’t have to pay the entire line of credit amount just what you spend. If the shutdown lasts on the longer side, ALL personal lines of credit will be brought down to a 0% interest rate. That’s right, even if you aren’t personally affected, you still benefit from a 0% APR!
 
2.) Overdraft Protection
 
If you are enrolled in ODP, one of the best ways to cover this expense is through a personal line of credit. It gives you the flexibility to pay the expense whenever you want, and you don’t incur any separate fees to use this as a back-up plan. When you open a checking account, overdraft protection is defaulted to withdraw from a savings account with a $1 fee. You have the ability to change this default at any time.

3.) Rainy Day Fund

A personal line of credit is a great way to have funds available for the unexpected. You never know what sort of expenses could pop up. Interest will only accrue if you make a withdrawal or cash advance. It is an evergreen loan– meaning you can keep it and never use it OR just pay back what you do use! An emergency expense might be:

  • An emergency home repair
  • A large medical bill
  • An updated computer or phone

Apply for a credit limit between $500 – $25000. Use what you need without having to reapply! Here are some other ideas you could use a PLOC for:

 

Manage your loan through our mobile app.

Google Play Store Apple App Store 

 

4.) Weddings

When it’s time to get married, the wedding is on – there’s no waiting for funds! The average wedding costs over $30,000, too much for one credit card, and the interest would make it incredibly more expensive. A personal loan beats credit cards and financing; you’ll have both a better repayment plan and interest rate.

You may even benefit further if you skip the deposit and offer to pay more of the total cost up front in exchange for a reduced bill.

5.) Adoption

Adopting a child is the consummate kindness but can be very expensive. Costs can exceed $50,000.

Obtaining financing for this process can be difficult. Unlike traditional big expenses, there’s no collateral; no one can repossess your child if you fall behind on your loans.

A personal loan can make this process a reality. Because the terms are short, you can also pay off your loan in a relatively short time.

6.) Short-term House Sales

Shows like “Divine Design” have inspired people to purchase properties, fix them up and sell them for a profit. This dream hobby or full-time job has one problem: capital.

When you buy a house to sell again, you’re likely borrowing as much as you can to pay for it. That doesn’t leave much money for fixing-up. Some remodeling can be done cheaply but much of it will require capital. Since you don’t have much equity in the property, borrowing against it isn’t possible.

A personal loan can be your answer. With affordable rates and flexible repayment terms, it can finance those improvements. And when you sell the house, you can repay the personal loan early without a penalty!

7.) Launching a Small Business

All new small-business owners face start-up costs. While these costs may be small, it will be a while before your business turns enough profit to recoup these expenses.

A personal loan can broaden your timeline to profitability. Rather than needing to turn a profit immediately, you can take time to develop the business. Since your debt servicing is a fixed cost throughout the course of the loan, it’s also easy to plan for repayment.

8.) Extra Education Expenses.

Your student loans may not cover all your education costs. Additionally, if you’re going back to school later in life, many traditional funding opportunities may be closed for you.

In these instances, you can take out a personal loan to cover the extra costs of your education. Instead of paying for those costs out of pocket or with a credit card, you can pay for them up-front with a loan you can budget for going forward, as it’s a fixed expense.

If there’s anything from wedding bells to adoption to business ventures and education expenses on your short-term horizon, a personal line of credit just might be your best way to handle the cost. It’s a far better choice than credit cards and can help make dreams a reality.

Here’s how to make an advance on your Personal Line of Credit through our Mobile App:

  1. Tap on “Make a Transfer” icon across the bottom.
  2. Tap in the “From” field, and select your personal line of credit.
  3. In the “To” field, select where you want the funds from your PLOC to go.
  4. Tap in the “Amount” field and fill in the amount you want to transfer OUT of your PLOC.
  5. Tap the “Transfer” button, you will get a confirmation screen when the transfer has completed.

Apply today!

RELATED: Learn More About Other Personal Loans

 

 

 

Want more credit union information?
Subscribe to eNews