A personal loan is an unsecured, meaning, a collateral-free loan. Given its speedy sanction, it allows you to meet urgent monetary needs. Under personal loans, borrowers have the choice of choosing what they want to use the loaned amount for.
Over the last few years, digital loan taking has made it possible for borrowers to apply for personal loans online very easily. An instant personal loan itself is a convenient way to acquire funding. And to add online loan taking to the mix makes it absolutely hassle-free. Nowadays, several lenders in the market offer loans online. Some financial institutions take it up a notch and introduce loan apps as well.
Since personal loans can be used for anything due to no end-use restriction, the following are some of the main reasons borrowers undertake personal loans. They will be discussed in detail below.
Situations When Personal Loan Helps:
A. Debt Consolidation
Most of the time, people have more than one form of debt. This is normal since credit cards and loans have become easily accessible. While undertaking them is simple, repayment can be overwhelming. This is mainly due to transactions to multiple lenders and each debt has a different EMI and interest rate. For a solution to such a situation, you can undertake a personal loan to pay consolidate your debts. Doing so will make handling your finances much easier since there will be only one personal loan EMI to pay.
In many instances, this solution can even be cost-effective. To estimate whether this will be more cost-effective, you can use a personal loan EMI calculator. It is a great tool that can help you gauge where you stand financially. Hence, enabling a more narrowed down search for a loan offer that caters to all your needs.
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B. Weddings
Putting together your dream wedding can be quite cost inducing. And nobody wants to make compromises on this important day. You deserve to have all your aspirations for this special day met. To make this possible, you can undertake an instant personal loan to fund your wedding expenses. It helps you enjoy as much as you can during the wedding, leaving the finances for later and you comfortably disburse the loan over its tenure.
C. One-Off Payments
One-off payments usually call for large sums of money and having liquid cash ready always is certainly not possible. Taking a personal loan for one-off payments can be extremely helpful because it relieves you of the burden of financing something by compromising on its quality. 2 such large one-off payments people generally require funding for are as follows:
- Financing new vehicles is a large expense. If you are on the lookout for purchasing a new 4-wheeler vehicle from a dealership, you will be most likely to get a lower interest rate and will have to pay smaller amounts in EMIs, as compared to secured loans. Unsecured loans, like personal loans, suffice your need for cash. These needs are usually not fulfilled through conventional lenders, for instance, banks and NBFC’s.
- Home renovations and improvements are a hefty expense and need a substantial amount of liquid cash to fund it. It is only natural that most people do not have large amounts of cash accumulated. Many people start saving up for home renovations, but it often falls short. This happens due to the sheer fact that quotations and estimates given by contractors are not precise. When plumbers and carpenters observe a space, they are only able to evaluate the surface-level problems. Therefore, very often, they find many more things to fix while working. Availing of an instant personal loan can very easily present you with the solution for a financial crunch at the time of renovations. And it helps you pay back in comfortable instalments.
D. Education
If you are aiming to go to a private institution or abroad for higher education, it is essential to have a financial plan due to how expensive it is. To fund these costs, most people resort to student loans. However, most of the time, they have very high interest rates. Making repayment challenging. However, a personal loan is a good alternative for student loans. Personal loans have lower sanction periods, lower interest rates, and require very minimal documentation. To get the best interest rate, make sure you carry out thorough research and compare multiple lenders before selecting one.
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There are various personal loan lenders in the market today and selecting one can be overwhelming. Shortlist lenders who offer competitive interest rates and flexible repayment periods to sustain your financial health in the long run!
