Learning Center Blog

5 Ways to Use Loans to Improve Your Financial Situation

Although you may think of taking out a loan as a bad thing, there are various ways that loans can help improve your financial situation and actually help you become debt free sooner.

Lower Your Mortgage Payment

Mortgage Refinance

If the interest rate on your current mortgage is 1%-2% higher than what you could refinance for, it is likely worth refinancing. You can refinance with the same loan term and lower your monthly payment, or refinance to a lower term and pay off your mortgage earlier and decrease the amount of interest paid over the life of the loan.

Consolidate Debt

Home Equity Loan or Line of Credit

Home equity and mortgage loans tend to have very low interest rates as compared to other types of loans. Once you have built up some equity in your home, you can use it to consolidate other high interest rate debt into one, low monthly payment.

Mortgage Refinance

As mentioned above, mortgage refinance loans tend to have very low interest rates. You can do a “cash-out” mortgage refinance to refinance your current mortgage plus get additional funds through a lien on your home. You can use these additional funds to consolidate high-interest rate debt.

Credit Card Balance Transfer

If you have a large amount of high interest rate credit card debt, a zero/low introductory rate balance transfer credit card could be a great way to consolidate debt from multiple credit cards. Balance transfers also help you pay off credit card debt faster when you are not paying significant interest on top of your credit card balance.

Add Value to Your Home

Home Equity Loan or Line of Credit

You can use a low-rate home equity loan or line of credit to pay for home improvements and repairs. Since large repairs that add value to the home are usually quite costly, they usually require a loan. Use a home equity loan to replace your roof, replace siding, build a home addition, or remodel parts of your home.

Fund Large Expenses

Home Equity Loan or Line of Credit

As we touched on earlier, real estate loans have very low interest rates, which make them an ideal way to fund a variety of purchases. When you compare the interest rate on a home equity loan to the interest rate on an auto loan or personal loan, you could save hundreds, or even thousands, of dollars on interest throughout the life of the loan. You can use a home equity loan to fund a car purchase, a wedding, college tuition, and more.

Improve Your Credit Score

Secured Credit Card

Secured credit cards are great for building and improving credit scores. Since secured cards are “secured” by a sum of money that is held in a savings account, anyone can open one, no matter what their current credit score. You can use a secured credit card as you would a normal card. As you make on-time payments, your credit score will improve.

Express Signature Loan

Much like a secured credit card, Patriot’s express signature loan does not require a credit check – and therefore, is not contingent on a good credit score. When you meet the other qualifying criteria, taking out a $1,000 express signature loan will improve your credit score as you make on-time payments.

If you’re ready to improve your financial situation, Patriot is here to help. Check out our various loan options, call 888-777-9982, or visit any of our branches to speak with one of our loan officers to learn more!