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07 OCTOBER, 2022
Life can be uncertain, and you may need quick funds at a time when you are least ready for it. To tackle such immediate funds requirements, many tend to turn to personal loans. This type of loan comes with simple eligibility criteria and an easy application process, making it a life saviour solution when you are facing a financial emergency.
Personal loans are typically unsecured, which means they do not need any collateral and are not tied to a specific purpose. Whether it's paying for a wedding, unexpected medical bills, taking a vacation, or financing a large purchase or project, a personal loan can give you the funds you need to get through a financial problem. Still wondering if you should avail one? Here are five compelling reasons to opt for a personal loan.
1. Consolidating debt
Many borrowers find it difficult to manage EMIs of multiple loans from several lenders. And if you miss any payment, it can impact your credit score negatively. To avoid this financial distress, applying for a personal loan is recommended. By consolidating your debts into one monthly payment, you can get your finances back on track.
2. Home renovation
If you are planning to renovate your kitchen or install a new roof or revamp your living room, a personal loan can be availed so that you can choose your own contractor and complete the work on your schedule. Moreover, you may also get a competitive personal loan interest rate if you have a good credit score and a long-term loyal relationship with the lender.
3. Improve credit score
Applying for a personal loan can help you establish a good payment history and improve your credit score. Lenders consider your payment history when determining your creditworthiness, so by making regular EMI payments, you can build a favourable repayment history.
4. Emergency cash assistance
The personal loan application process is easy and requires minimal documentation, so you can opt for this loan to cover unexpected emergency situations like:
Moreover, most banks also offer a personal loan EMI calculator on their websites to help borrowers calculate the Equated Monthly Instalments (EMIs) in advance. Once you have calculated the EMIs and additional fees, you can confidently hit the personal loan apply online button.
5. Relocating expenses
When you relocate to a new place, you have to bear the expenses of packing up your belongings and transportation costs to shift to a new location. And if you want to rent an apartment in the new location, you may need to cover the cost of a security deposit, new furnishings, kitchen items, etc. Here, a personal loan can be availed to cover the need for extra cash required.
These are some of the legitimate reasons or situations when applying for a personal loan makes sense. The loan comes with a hassle-free documentation process, instant approvals and processing, flexible repayment tenure, and more such benefits. But it is equally important to compare the interest rates of different lenders and other associated fees to find a personal loan EMI you can afford.
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