In today’s times when inflation rates are at a historical high and people’s spending appetite is changing drastically, having the right financing avenues has become a necessity. The right financing tools not only enable people to fulfil their obligations, but also help roll the country’s GDP by increasing consumer purchase power. One of the most popular financing tools that you can rely on is a loan.
Today, there is a wide range of loans designed to serve different purposes. For example, you get home loans, car loans, gold loans, education loans and personal loans. Of all these loans, a personal loan is the most flexible.
A personal loan comes with unrestricted end-use. That means you can use the loan in any way you want. In addition to that, a personal loan is an unsecured loan; this means you can avail this loan without any collateral. It also offers easy repayment, flexible tenure and minimum hassles.
With the increased ease of accessing personal loans, people are using these financial tools for multiple purposes. There can be various reasons to avail a personal loan. However, here are the top 5 reasons why you may need a personal loan.
Top 5 Reasons Why You May Need a Personal Loan
A personal loan can come to your aid in different situations. It helps you navigate through emergencies, manage a financial crunch, or fulfil your aspirations. Here are the top 5 reasons to avail a personal loan.
1. Financing expenses related to lifestyle upgradation
One of the top reasons why you may need additional financing is upgrading your lifestyle. The easy availability of these loans has made it possible to make purchase decisions that help upgrade your overall lifestyle.
Whether you want to buy a high-end product like an iPhone, laptop, or any other electronic gadget or you want to go for a trip, a personal loan can help. You can easily avail a personal loan of up to Rs. 1.5 lakh through a loan app.
2. Funding higher education
Another common reason why you might need to avail a personal advance would be to finance higher education’s peripheral expenses. The increasing costs of higher education have made it increasingly difficult to pay for all other expenses that might come along with the school fees.
Especially when your child is pursuing higher education from a college/university located overseas, these peripheral costs can go pretty high. For instance, paying for flight tickets, lodging expenses, fees for co-curricular activities, and other expenses need additional funding. A personal loan can help you meet these expenses with ease.
3. Meeting medical emergencies
Medical emergencies are situations needing time-sensitive financing. While a health insurance policy provides coverage for a wide range of medical expenses, it may not be efficient in providing financing for medical expenses right when it is needed as insurance coverage usually comes through reimbursement.
Further, the reach of medical insurance coverage in India is limited too. Thus, leaving many exposed to meeting financing gaps when a medical emergency arises. In such a situation, a personal loan can come in handy. A personal loan is approved within minutes making it the most suitable option for financing medical expenses. A personal loan also provides you with the freedom to go for the treatment and hospital of your choice.
4. Paying for home renovation
Home renovation can involve the expenditure of lump-sum financing, which can drain your savings if not planned well. A personal loan thus becomes useful in meeting these expenses. It comes with zero restrictions to end use and can be utilised for any purpose that the borrower needs.
When utilising a personal loan for home renovation, borrowers can also benefit by claiming income tax deductions for both principal and interest components. It is especially helpful when you need urgent finances to take care of urgent repairs. However, you can also use the fund for home upgradation, home extension, changing the furniture or getting new interiors.
5. Improve your credit score
You can also consider availing a personal loan, for improving your credit score. This is especially helpful for people who have never availed any credit in the past. You can opt for a small ticket personal loan to build your credit profile. By making regular and timely payments, you can build your credit score. This will help you in availing high value loans like a home loan or car loan or getting a credit card with a higher limit.
In addition to the above-mentioned reasons, you can also avail a personal loan to consolidate your existing debts. If you have multiple loans with varying interest rates, then you might consider consolidating your debts with a personal loan. This not only makes repayment more convenient with one single EMI but can also help you reduce your interest payout.
Apart from this, many people also avail a personal loan to meet wedding expenses or fulfil any other financial obligation. The end-use of these loans is unlimited. As such, you can use a personal loan to fulfil a wide range of spending needs.