Number of Ways to Use a Personal Loan
Best Personal loan area wonderful financial assistance if you know how to use them. A personal loan is the best option for individuals to fulfill the financial emergency they may experience in buying a house, vehicle, small home renovations, miscellaneous bills, moving expenses, wedding expenses, vacations, children’s higher education, etc.
What is a personal loan?
A personal loan is a short to medium-term unsecured loan lent by a bank or a non-banking financial company (NBFC) to customers to meet their unexpected personal needs or for debt consolidation. The loan seekers are not asked to pledge any asset as collateral. These loans are issued on the basis of key criteria such as income level, credit history, repayment capacity, etc. Each individual’s credit history and financial status will affect the interest rates of a personal loan offered.
10 Common Uses for a Personal Loan
1. Debt Consolidation
Managing different amounts of debt with multiple creditors is a difficult task. Each debt will have its own deadline, interest rate, and mode of payment. As a result of this, you might miss payments and end up paying more interest over time due to higher interest rates. A personal loan will simplify bill payment by combining multiple debts – usually resulting due to credit cards - into a single, larger piece of debt. Moreover, interest rates applicable to credit cards (2.5% to 3% per month) are much higher than that on a personal loan (12%-15% per annum). Hence, it will be a wiser choice to pay off all your credit card debts by getting a personal loan. You can also choose to make multiple monthly payments to various creditors by using a personal loan. Debt consolidation reduces costs by lowering the interest rate on debt and reducing the monthly payment.
2. It helps with unplanned expenses
A financial crisis can hit anyone no matter what his/her financial status is. In such a case, a personal loan can be a great help. Hence, it will be a prudent decision to get a personal loan for these unplanned expenses rather than dipping into your savings. By taking a personal loan to cover such expenses, you can build your credit score and protect your financial egg.
3. Miscellaneous bills
Due to unemployment, underemployment, and unreliable employment, you can end up paying your rent and other bills late. However, everyone wants to get rid of the dues on time. A personal loan can regulate your cash flow and can use it for almost everything, including paying the bills, school fees, rent, etc.
4. Home repairs and improvements
If your home needs remolding, repairs, or improvements, and you have not budgeted for the same, or a project costs more than you anticipated, a personal loan can cover such unbudgeted expenses. A personal loan is a helpful financial tool if you feel the pinch.
Weddings are becoming an increasingly expensive affair, and the pressure for parents to hold a glamorous wedding is building up continuously. But, sometimes the wedding cost exceeds the budget, which is why people should consider taking a wedding loan to make your/ your child’s marriage unforgettable.
6. Big-ticket purchase
A personal loan is a helpful financial tool for major purchases like computers, the latest electronic gadgets, home appliances, and many more for which you did not allocate the budget in advance.
If you are smitten by wanderlust, but can’t afford your exotic vacation, a personal loan can fit the bill. A personal loan is a great way to meet your short-term financial requirements, in this case, your holiday. With lesser interest rates than credit cards, a personal loan is a much wiser way to fund your holiday.
8. Medical expenses
Life is unpredictable - medical emergencies can happen to anyone. A personal loan for medical expenses will help you deal with an unexpected blow. This kind of loan covers all expenses such as doctor’s fees, medical bills, hospital stay, etc.
9. Buying a car
If you need a car and can’t get other financings like a car loan, a personal loan can help supply the funds you need for your new car. Usually, lax restrictions will allow you to use personal loans the way you want to use it, including getting a new vehicle or refinancing your current loan.
10. Starting a business
If you don’t have a current account or business credit card, a personal loan with a low-interest rate can provide you the capital you need to set up a business. Once your business thrives, you’ll be able to pay off the loan instantly.
Personal loans have a variety of uses. No matter how you choose to use it, it is up to you. Make sure to explore all the details and repayment terms & conditions before applying for a personal loan. For more information about personal loans, you can go over to the personal loan page on Afinoz.com.
What is Afinoz?
Afinoz.com is India's foremost online financial marketplace for availing loans and investments. Our main objective is to make the process of getting a loan or making an investment safer, convenient, and hassle-free for individuals. We work with public and private banks, NBFCs, and mutual fund houses across the entire country and offer unbiased quotations on financial products. You can contact our team to get more information or apply for a loan or investment by calling on +0120-411-0376 or by emailing at firstname.lastname@example.org. Afinoz.com provides solutions that are quick, reliable, transparent, confidential, and above all free.