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7 Top Reasons Why You Must Consider Applying for a Personal Loan

If you’re unprepared, you may have to dip into your savings, and this isn’t ideal. Thankfully, you can avail of a personal loan to minimise the burden.

ABP Digital Brand Studio Published 31.08.23, 09:10 PM

Personal loans can help you meet both planned and unplanned financial expenses. Personal loans are usually unsecured, so you do not have to put up collateral to access funding.

Moreover, these loans typically have fixed interest rates, resulting in fixed repayment amounts. As you are aware of the personal loan terms beforehand, it is easier for you to plan for its repayment. You can also use a personal loan EMI calculator to determine your monthly obligations.

Read on to know more about the top reasons why you must opt for a personal loan.

Provides Emergency Assistance

If you’re unprepared, you may have to dip into your savings, and this isn’t ideal. Thankfully, you can avail of a personal loan to minimise the burden.

Most lenders offer an online application process, which can be completed within minutes. Moreover, if you meet the lender's eligibility criteria, they can approve your loan request quickly. They may also disburse the amount on the same day, allowing you to cover your urgent expenses.

You can also use a personal loan EMI calculator to determine the monthly amount you will have to pay as EMI for servicing your loan.

Helps in Consolidating Debt

One of the most common reasons people avail of a personal loan is debt consolidation. It allows you to consolidate multiple loans into one. This way, you can save considerably on the amount you pay as interest, while also streamlining payments.

Remember, when availing a personal loan for debt consolidation, do a thorough cost benefit analysis beforehand. It is only worth it if you close your high-interest credit accounts, and if the cost for doing so is low. If you have to pay prepayment fees, and other such charges, consolidating your debt may not be ideal.

Home Renovation and Furnishing

While you can access funds to buy a home through home loans, furnishing or renovating your home also costs enough to put a dent in your savings. Also, you will need to put your home as collateral to avail of these lending options. These lending options will have more stringent eligibility requirements than personal loans. So, to cover these expenses, you can opt for a personal loan.

A personal loan is much easier to avail as it is unsecured. You don’t have to pledge your property and you can still qualify for an ample sanction. Do note that the terms will be different, and the amount you get will be based on your financial standing.

Financing the Purchase of a Vehicle

You can also use personal loans to finance the cost of your bike or a car without having to put it on collateral. However, note that the rate of interest on personal loans will be higher than on auto loans.

Thus, a personal loan might be a better option if you wish to avoid putting your newly-purchased vehicle as security, and need the funds for other costs. This can include modifications, accessories, or even add-on perks that come with a new vehicle.

Covers Wedding Expenses

Considering the importance of a wedding, you may want it to go perfectly and you need adequate funding to ensure that it does. Here, you have the option of availing a personal loan to pay for your wedding without compromising on anything.

You get to opt for a tenure that goes up to 5 years, thus ensuring hassle-free repayment.

Fulfils Cost of Higher Education for Children

Providing higher education to your children can be expensive. The cost would be much higher if you want your child to study at a leading university or one situated overseas.

You can use a personal loan to fund your child's higher education, and cover all costs without any restrictions. This is a major benefit over the traditional education loan, as funds availed through these instruments can only be used to pay tuition costs.

As such, you will have to pay travel, accommodation, visa, and other ancillary costs out of pocket. But with a personal loan, you can handle all these expenses, and more, without any restrictions.

Finances Big Purchases

You can also use funds from personal loans to finance your big-ticket purchases, like high-end electronic appliances, including mobile phones, televisions, etc. Moreover, you can use these loans to cover your vacation expenses like hotel bookings, flight tickets, and so on.

Considering all these benefits, it is clear that a personal loan is a great option for most individuals. They are easy to access, have lenient criteria, and can be used freely for most expenses. Moreover, modern lenders have simplified access to these loans down to a few clicks and offer a completely digital experience.

Disclaimer: This is a sponsored article and does not involve any editorial input. The views expressed, including any statements, views, opinions, announcements, declarations, or affirmations are neither supported, nor endorsed by The Telegraph Online.

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