It would be excellent if we all had adequate funds to meet our mandatory monthly expenses, wants and needs. However, life throws various situations and conditions where we require borrowing cash, whether it be from the personal cash lender, friends or bank and loved ones. According to the conventional ways of borrowing funds, the process involved usually is long. Time-consuming documentation procedure and after this the wait for loan amount disbursement mostly may not help you meet your urgent needs. A personal loan is an advanced and the newest form of borrowing funds for multiple reasons that have made the borrowing process easy and quick for borrowers. Have any idea why a personal loan is different from the other unsecured loan options. An unsecured character suggests you do not require putting any security or collateral like your car, home etc., against the loan. Personal loan lenders use the credit score and other parameters to determine the borrower’s eligibility.
Reasons to avail of personal loan:
Cover the medical costs:
There are specific emergencies and medical problems where we require a massive amount of money for paying off the bill and various medical charges. Moreover, we cannot disapprove of the fact that just a few of us have the funds available to us. In these cases, every moment counts because you cannot afford to procrastinate in a matter of life and death. In such a scenario, it comes across to be one of the best options that can help you out. A loan can even help you when required and is available in a short time.
Debt consolidation
Holding and repaying various debts with different creditors can be highly tricky to control. Different debts have interest rates that are different, and repaying them together monthly can come across to be a burden. More debt may accumulate if you miss repaying, which would cause you to incur heavy finance charges and late payment fees over time. Debt consolidation is one of the alternatives to this problem. You can simply click on the SBI personal loan apply button or visit other lenders for the personal loan. Use the provided money from lenders for debt consolidation.
Consolidating your existing various loans into one at a lower rate of interest for longer repayment tenure, if required, is one of the prudent ways to save the high-interest cost. For the existing home loan borrowers with various loans, availing of top-up home loans is a prudent option, while other seekers can avail of a loan against property or loan against security options.
Wedding expenses
Everybody is eager to have a cherished wedding. This is because they want it to be in their family members’ memories for a long time. There are various expenses for the wedding that are difficult to avoid, such as gifts, dresses, jewellery etc. All such expenditures may be impossible to be covered with savings and investments, which makes you bound to borrow funds. However, an instant personal loan has come across to be a problem solver for families. Remember to always assess your personal loan repayment capacity before availing of the loan.
To begin a business
Generally, business loans are available to fund a startup or scale up your business. However, with various lenders, you may require security to avail loan. An additional crucial fact is you cannot get a business loan at the initial stage of a business enterprise. You require 3-year P/L statements as well as ITR records. But all such documents are not needed in the case of the NBFC or private banks. However, a prudent business plan is important to get filed when it is about availing of business loans. Availing personal loans and using them for business is a good decision to make if you are unable to avail of loans to finance your company.
Repaying credit card dues
Buying distinct things using a credit card is tempting. Individuals fail to resist temptation and thus are bound to use it. In case your purchases through credit cards are on EMI form, it may be affordable, but it converts into a debt trap if you are unable to repay your EMI within the due date. The amount would probably continue rising as the interest rate on credit cards can go as high as 52 percent p.a.; hence, this is a kind of a never-ending procedure until you pre-close the loan. A good choice is by availing of a personal loan and using this money to end all your credit card linked due. Interest that is payable against the loan is anywhere between 10 and 24 percent p.a., which is much more less when compared to the credit card finance charges.
Home amelioration
Do you want to redesign your home? And for this, you have no home loan to avail of the top-up home loan option at a lower interest rate. A personal loan is one of the best options you can avail of. No security or collateral is required for availing of the personal loan option. You simply can apply for the personal loan from any bank, which you consider is a great choice and receive money either on the same day of application in the case of a pre-approved personal loan or within 2 to 7 days in the case of a regular personal loan.
Bottom line
For the above reasons, now you may be clear when you can avail of a personal loan to mitigate your urgent needs. Note that before you avail of the personal loan, there are specific things you must consider keeping in mind. These specifics include your repayment capacity, credit score, monthly income, FOIR (fixed obligation to income ratio) etc. Thus, ensure to go through these factors to boost your personal loan approval chances.
Also, ensure to keep your documents handy while submitting your personal loan application online. A few of the important documents include your identity proof (Aadhaar card, passport, driving license, voter ID etc.), address proof (passport copy, driving license, Aadhaar card, utility bills, rent agreement etc.), income proof (salary proof of past 3 months, bank statements of last 6 months, form 16 or ITR etc.)