Saturday, January 21, 2017
Here is When You Should Take a Personal Loan
It is not possible to predict when you may suddenly require money for meeting an emergency. Although you may have saved for such situations, it is likely that you may face financial constraints while meeting these.
An easier and quicker option to meet emergency financial needs is personal finance. The entire procedure from application to disbursement of the loan is completed within a few days. Although it is easy to avail of such loans, you must be cautious while using the loan amount. Here are five situations when opting for personal finance is advisable.
1. Repaying high-cost loans
The interest rates on personal loans are higher than other facilities like aloan against property (LAP). However, there are some other types of loans that are more expensive than personal finance. Repaying these high-cost loans through personal finance will help you save money on your borrowings.
2. Funding higher education
Many financial institutions provide education loans to enable students to fulfill their dream of higher education. Unfortunately, such loans are available only for certain reputed educational institutions. Furthermore, it is likely that you may be unable to cover additional expenses, such as travel and accommodation. These expenses may be easily met using an instant personal loan.
3. Meeting medical emergencies
Medical emergencies may arise anytime. Even if you are covered by a health insurance plan, the coverage may be insufficient to meet your current medical expenses. You may use your personal savings to meet such emergencies. However, if you do not have adequate savings, a personal loan proves to be beneficial in such a case. Opting for an online loan is advisable because the process is quick, thereby eliminating the stress of arranging for the funds while dealing with medical emergencies.
4. Funding wedding expenses
Indian weddings are important social happenings and entail a lot of expenses. However, your savings may be insufficient to meet all the expenses related to your dream wedding. Overcoming this shortfall of funds may be possible with a quick personal loan.
5. Clearing credit card dues
You may find yourself in a debt trap if you have been paying only the minimum amount due on your credit card bills. Over an extended period of time, this may become a huge liability that incurs a high rate of interest. Some credit card companies may levy as much as 40% per annum on your outstanding amount as finance charges. Opting for personal finance to repay credit card debt is advisable. This will help you to not only save money on the interest payment but also reduce the burden on your cash outflows.
One major advantage of these loans is that they are unsecured. This means you do not have to keep your personal asset as security against the loan. Therefore, in case you are unable to service the loan on time, you do not risk losing your asset to the financial institution. It is important you understand all the terms and conditions that are related to the loan. Comparing different financial institutions and their offerings, such as loan limit,rates of interest, fees and charges, as well as the tenure of the loan before making your choice will help you arrive at an informed decision.