Gone are the days when you used to put your hard-earned coins in a pot to suffice your big needs or meet your unforeseen emergencies. Today, if you are not investing your money, you are losing your money, thanks to the rapid rise in inflation. But if you put all your savings into investments, how will you meet your expenses? Well, a personal loan is the answer.
The ease and availability of personal loans has increased in recent years and with the introduction of loan apps, the tedious process of applying for a personal loan has become much easier. Though personal loans are available quite easily these days, it’s still important to be a responsible borrower and only apply for a personal loan when you are in urgent need of money.
Now, check out these five situations where you should apply for a personal loan and make the most of it.
When You Should Take a Personal Loan
Here is a list of the reasons why you should take a personal loan.
1. Consolidating previous debts
You can use personal loans to pay off your previous debts with higher interest rates. If you are burdened by multiple EMIs of prior loans, whether it is a credit card, school loan, house loan, or automobile loan, you can apply for a personal loan and consolidate all your past debt accounts in one. Having one single debt saves you from the worry of paying different EMIs on different days. Also, when you have multiple debts, it is quite easy to miss an EMI, which can affect your credit score. But before switching to a personal loan, make sure to check out the interest rates offered on personal loans by different financial institutions.
A personal loan may help you reduce your interest expenses while keeping your credit history intact and may enable you to make significant financial savings. Overall, the interest rate is the point of emphasis here, so you should consider taking a personal loan only if your interest rate is lower than your previous loan.
2. Medical Emergencies
Medical emergencies are something that can come to you like a bolt from the blue, and the nature of such circumstances necessitates immediate access to finances. Though health insurance can come to your aid, there are certain limitations. Firstly, health insurance does not cover all the end-to-end expenses that may include, travel or food, and secondly, if your insurer does not offer the cashless feature then you will need the funds in your account.
Sometimes these expenses are so high that they can delay or impact your choice of treatment. But with a personal loan, you can afford the best treatment without worrying about the money. Unlike other loans, personal loans do not require any collateral and can be paid off in a flexible repayment schedule. Also, the qualifying requirements for a personal loan are minimal, making your chance of being eligible and your loan getting approved higher. Furthermore, a personal loan can be processed within minutes and the funds can be disbursed into your account within hours.
3. Higher Education
For higher education, most people prefer education loans, but the only drawback here is the hefty interest rate levied on them. In addition, various eligibility restrictions occasionally prevent people from obtaining an education loan. Not all colleges qualify for education loans. Furthermore, there are situations where student loans fall short of covering costs like tuition, moving fees or living expenditures.
Personal loans can be quite helpful in these situations. You can utilise the money from your loan to cover costs other than living expenses, such as moving charges or college tuition. Thus, whether you wish to enrol in a master’s programme or study a course for advanced skill certification, a personal loan will be beneficial to you. With instant loan apps, you can also get a personal loan for a small amount at a very low-interest rate, for skill upgradation programmes or training from online institutes.
4. Wedding Expenses
A wedding is one of the most memorable events for not only the bride and groom but their families as well. The occasion of marriage has always played a significant part in all cultures. People invest a hefty amount of money to have a grand wedding, especially in India. Whether it is a destination wedding that you dream of or a huge guest list that you want to entertain, getting a personal loan for your wedding can make your dreams come true. You can either apply for it via loan apps or you can visit your nearby branch and secure a personal loan.
5. Home Renovation
Another expense where a home loan can act as a boon is home renovation. Whether you have bought a new property or want to refurnish your old home, home renovation can be a necessary but hefty cost. Buying the best electronic gadgets or home appliances can drill a hole in your pocket, or you may have to wait for months or even a year to buy the best quality products on your Wishlist. In such cases, a personal loan can be your best bet.
Personal loans are particularly versatile since there are no restrictions on how the loan amount can be used. In a personal loan, you can secure a loan amount at a low-interest rate if you have a high credit score. It is also easy to apply, and the processing time, as well as the processing fees, are both low.
All the reasons stated above are types of large expenses that a person may encounter in their life. There are no restrictions on how and where you may utilise your personal loan funds. Therefore, apart from these reasons, you can also use your personal loan for travelling, making large purchases, covering relocation expenses, and many more.
You can now apply for an easy personal loan via loan apps. Although personal loans are incredibly beneficial, you should only apply for them when it makes sense. So, if you are sure enough to manage all your expenses and make timely repayment, obtaining a personal loan can be very beneficial for you.