It would be great if we all have enough money for fulfilling all of our living expenses, needs and wants. But life throws at us conditions and situations where we need to borrow cash whether it be from a personal money lender, a bank or your friends and loved ones. However, if you’ve ever tried to take a loan in the conventional way you can understand the issues involved in the process. Time-consuming documentation process and then the wait for the disbursement of their loan amount. Personal loans are the advanced and newest means of borrowing money for multiple purposes that has made the borrowing procedure quick and easy for the borrowers. Why is a personal loan distinct from other loans is its”unsecured” nature. The unsecured character suggests that you don’t need to put up any collateral such as your home, car, etc. against the loan. Lenders use credit score and other factors to determine the eligibility of the borrower.
5 Reasons Why (and When) you Need a LoanDinesh Maheshwari November 12, 2019
Reasons to Get a Personal Loan:
1. Covering Medical Expenses
There are certain emergencies and medical issues where we need a huge amount of money to payoff bills and medical charges. And we can not deny in the fact only a few of us have that available with us to pay. In such a situation every moment counts as it be can’t afford to delay and becomes a matter of life and death. In this scenario personal loan is your one option available to help out. A loan can assist you when needed and is available in a short time.
2. Debt Consolidation
Possessing and repaying number of debts with various creditors can be exceedingly tricky to control. Various debts have rates of interest that are different, and paying them together monthly could be a burden. More debt might come if you missed a payment and then you have to pay them with high interest rates over time. Debt consolidation is the alternative to these problems. You can apply for a personal loan for a debt consolidation from any bank. Use the money borrowed as a private loan to pay off your creditors. This will leave you to make and that will be against your personal loan. Consolidation saves your money and time both and is among the best benefits that a loan can provide.
3. Wedding Expenses
Everybody wants a cherished wedding. They would like it to be in the memories of family members and friends forever. There are many expenditures for a wedding that can not be avoided like dresses jewellery, gifts and more. All these expenses can not be covered with that time and savings you’re bound to borrow money. But quick personal loans have solved this problem for many of the families. Always, before you apply for a personal loan evaluate your repaying capacity to avoid any future burden.
4. To Start a Business
Usually, business loans are taken to finance a startup or scaling a business. However, with many of the lenders you need to provide a collateral to get a loan. An additional important fact is you cannot get a business loan at the first stage of a business enterprise. You need 3 year profit loss statements and ITR records. But all these documents are not required in case of private banks or NBFC. However, a full proof business plan is essential to be filed when it comes to get a business loan. Taking a personal loan and using this for the business is one of the best choice if you are not able to get a loan, to fund your company.
5. Paying Credit Card Bills
Purchasing different things using a credit card is tempting. People cannot resist this temptation and therefore are bound to make use of it. But the simple fact is credit card is obviously. If your purchase is on EMI it’s affordable but it becomes a debt trap if you are not able to pay your EMI on time. The amount will probably keep on increasing as the interest rate on a credit card is 20% to 36% per annum. And hence it becomes a sort of never-ending process until you pre-close it. A smart choice is by taking a personal loan and use that money to close your credit card. The interest payable against a loan is 16% which is very less compared to that of a charge card.
6. Home Improvement
Wish to redesign your house, but do not want to dive or require a house equity loan or home loan Personal loans can be a perfect alternative. Guarantor or no collateral needed to be eligible for a personal loan. You can apply from any bank which you believe is best suited to you and receive the money in a few days.
There are lots of reason to opt for an individual to take a personal loan, the above mentioned are only a few. However, before you opt for a loan, certain things should be kept in mind and those are borrowed according to your own repaying capacity, and to get a personal loan without any problems you need to have all the required loan related documents and a good credit score.