Personal loans becoming more common, can lead to debt problems

On Behalf of | Nov 8, 2018 | personal bankruptcy |

People can quickly become overwhelmed with debt. Sometimes finances become tight when a job is suddenly and unexpectedly lost. In other instances, the onset of a serious medical condition leaves a family struggling to get by. There are some debt options that may help prevent one from becoming overwhelmed, but even these options pose financial risks.

One of these options is personal loans. Many individuals, especially millennials, are turning to personal loans to wipe out higher-interest bearing debts, like those related to credit cards. One benefit these borrowers see to personal loans is that debt can’t be added to the balance like it easily can be when it comes to credit cards. Another reason personal loans are becoming much more prevalent is because they are easily obtained from online lenders that continue to expand their reach.

Millennials are using these loans to cover larger expenses, too, such as weddings and moves. This can cause a significant amount of debt to accumulate. Although this debt may be more manageable than credit card debt, it can become overwhelming to those who cannot afford to take on that debt in the first place as well as for those who face sudden financial hardship.

These personal loans can affect older individuals, too. They often utilize personal loans to cover medical expenses, home improvements and even vacations. Again, depending on the circumstances at hand, these loans, in addition to other debt, can create a dire financial situation for some.

When this is the case, it may be time to consider debt relief options, including personal bankruptcy. Bankruptcy, when successfully petitioned for, can allow an individual to eliminate debt and reclaim his or her financial freedom. For this reason, those struggling with debt may want to discuss their debt relief options with a skilled legal professional.