School fees, insurance premiums, vehicle registrations…these annual expenses come with predictable regularity. Everybody gets them but personal loans are rarely used to pay them off.
They won’t go away, and they won’t stay the same amount yearly. Common sense says we should be prepared for them, but even if you have them budgeted already, you might be caught unprepared this year. Between last year’s payment and this year’s, many things have happened, including emergency expenses.
Rather than paying these regular expenses with your credit card, why not consider getting a personal loan to pay off all of your annual expenses?
Personal loans are a smart way to settle your yearly obligations. You get a manageable repayment schedule on fixed rates—and your debt doesn’t balloon. With personal loans, your payments are applied to the principal and your interest in uniform rates. With credit cards though, you don’t know how much of your repayment goes to paying the principal (usually miniscule) and to paying the interest (usually more).
Personal loans are also the better alternative if you can easily pay off loans or a layby but you’re having difficulty saving money. By paying your annual expenses in one go, you can easily budget what goes to your personal loans and to your savings account (possibly an emergency fund). This way, you’ll have a bigger legroom for the coming year’s expenses and unexpected emergencies.