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Should You Take Out a Personal Loan?

By Jessica Price

December 19, 2023

With the New Year just around the corner, financial wellness may be on your mind. The holidays can be expensive, and for some of us our willpower will be tested. It’s hard to stick to financial goals and keep on track when the whole season screams spend money! Travel, gifts, extra meals and themed events or outings can add up quickly and can be yearly costs for many people. Unfortunately, there are a lot of people who also live paycheck to paycheck1 which can complicate the financial strain of a holiday budget. In fact, only 38% of people report not living paycheck to paycheck. While the best course of action each year is to create a detailed budget, not only for monthly expenses but for seasonal expenses such as the holidays, that’s not what everyone does. Many people face the end of the year with a pit in their stomach because there are financial obligations that just can’t be covered by their bank account balance. Personal loans are one option when this situation arises. It’s important to weigh the pros and cons of a personal loan before applying. Is a loan the best option for your situation? Do you have the ability to repay the loan? Are there any other potential solutions such as borrowing from friends or family that you have not explored? These questions may pop up when considering a personal loan to cover expenses, but before diving into these details it’s also important to understand how personal loans work, what personal loans can be used for, and how to ensure you’re borrowing responsibly.

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How do Personal Loans work?

Personal loans come in various forms. CheckSmart, for example, offers Payday Loans, Installment Loans, and Title Loans where applicable according to state laws and regulations. While Payday Loans are typically paid back on your next pay day, Installment Loans, and Title Loans are usually paid back over time. Since Payday Loans are short-term loans, in this article we’ll stick to a discussion about Installment Loans and Title Loans. Keep in mind, currently, Installment Loans and Title Loans are only available at Arizona CheckSmart locations. Always check with your local CheckSmart store for information about loan and store service availability.

Personal loans are distributed as a single lump sum3 in the case of Installment Loans and Title Loans from CheckSmart. Personal loans can be secured or unsecured.4 If you’re applying for a secured loan, you will need something to offer as collateral. This means if you default on the loan, the lender could take possession of the collateral which can range from money to valuable assets such as a car or house. An unsecured loan does not require collateral. CheckSmart offers unsecured personal loans in the form of Installment Loans. Alternately, Title Loans require a clear title to an approved vehicle as part of the approval process. So, what can Personal Loans be used for? You might wonder if there are stipulations regarding the way you can spend a personal loan, and fortunately there are not! As long as you are borrowing for personal reasons within all laws and regulations of your state, you can do as you wish with the funds.

Responsible Borrowing

Before you apply for a personal loan, it’s important to consider your ability to repay the loan2 on time or even early if you want to lower the total cost of your loan. Creating a budget that helps you prioritize debt repayment is a great way to reach your goals when it comes to quick, efficient repayment of your loan. In action, this may look like cutting unnecessary spending until the loan is repaid or taking on side jobs to make extra money. Taking your time and assessing your options prior to taking on a personal loan will help you to make the decision that is best for you and your financial goals. If you’re considering a personal loan to cover annual expenses, it’s important to create a plan for the coming year to repay the loan on time if not early to lower the total interest paid. If you borrow from CheckSmart, there is no penalty for paying off a loan early and in many cases you can save on the total cost of your loan5 by reducing the interest paid. Whether or not you’re able to pay your loan off early, in order to practice responsible borrowing you’ll want to at least confirm that there is room in your budget to make your loan payments on time. Planning your debt repayment prior to borrowing can help you maintain your financial health.

new year financial plan

The final consideration when thinking about applying for a personal loan is to choose a reputable lender. CheckSmart is committed to providing exceptional service and is a proud member of the Online Lenders Alliance (OLA). The OLA provides guidelines for lenders to follow which go above and beyond state regulated requirements for lenders. CheckSmart follows the best practices outlined by the OLA, and our membership is very important to us. Finding a lender that is focused on providing information, great customer service, and products that are helpful when you need them most is important. One of the goals our team has each year is to educate our customers as much as possible about the loans we offer, the services our stores provide, and best practices for budgeting and long-term financial health. We believe that the more our customers understand their options and the more help they have when creating goals for the future, the better their experience will be.


1Dickler, Jessica (2023, Oct 31). 62% of Americans are still living paycheck to paycheck, making it “the main financial lifestyle,” report finds Retrieved from:

2Bareham, Hanneh (2023, Nov 13). What is a personal loan? Retrieved from:

3Annie Millerbernd and Ronita Choudhuri-Wade (2023, Feb 15). Personal Loans vs. Credit Cards: What’s the Difference? Retrieved from:

4Bond, Casey (2023, Apr 14). How Do Personal Loans Work? Retrieved from:

5Haughn, Raija (2023, Apr 24). 5 tips to pay of personal loans early Retrieved from:

Jessica is hyper-focused on making information about the Personal Loans offered by CheckSmart including Payday Loans, Installment Loans, and Title Loans accessible and easy to understand. Learning the basics about finances shouldn’t be complicated after all! The key to responsible borrowing is understanding the loans you’re considering, and it’s Jessica’s mission to help anyone considering a loan make an informed decision. Jessica is passionate about sharing easy-to-follow Budgeting Tips and helping readers increase their financial literacy in the Financial Corner of the blog. You’ll find great budgeting tips, Simplified Savings tips, and information that will help you improve your financial wellness sprinkled throughout each of her blogs.

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