Well…..as evident from the name it is for any personal purpose. You don’t need to get your reason approved for a personal loan. Almost all the lenders offer personal loan for any purpose. And it is collateral free. Here, we will tell you some of the reasons for which you can avail a personal loan.
A personal loan is an unsecured loan that involves borrowing a certain amount of money and paying the creditor off with the interest in a structured schedule. This type of loan does not require to put up any collateral (such as house, car, property, etc.) to get the loan. Instead of its lenders use the applicant’s credit and other factors to determine eligibility. One of the major benefits is that it comes with the complete flexibility use of the loan amount means the personal loan can be used for any purpose as per the borrower’s choice.
But there is one question that mostly revolves in almost every loan seeker’s mind i.e. is personal loan a good option to tide over financial emergencies?
Well, personal loan offers a safe alternative as compared to asking the relatives for help or mortgaging the assets which are a common practice in India. This is why personal loan has become even more popular these days.
Here are the five common reasons why people apply online for a personal loan:
1. To Pay-off the Wedding Expenses
A wedding includes a lavish and an elaborated party, especially in India. But, not everyone has enough cash to make a dream wedding happen. Thankfully, it is possible to take a personal loan online of the required amount based on the eligibility.
Again, today applicants are turning to personal loan for organizing a destination wedding. Top 12 places for destination wedding are
- Andaman and Nicobar Islands
2. For a Home Improvement Project
Whether you want to knock down some walls or buy new equipment and furnishings, it could cost anything from a few thousand rupees to more based on the renovations you wish to make. Using the savings is a popular option to pay for the home renovation project. However, if you don’t have enough funds, you can always apply for a personal loan online to meet the cash requirement.
3. Debt Consolidation
Are you facing problem to keep track of the repayments of multiple loans? Debt consolidation could be a great strategy to pay off loans sooner. Various people take a personal loan at a low rate of interest to pay off the other debts. This strategy can not only save the money issue but also boost up the credit score by reducing the number of debts. As compared to a personal loan, credit card interest rate is high. Personal loan interest rate starts from 10.90% onwards for 1 year. Whereas, credit card interest rate start 24% p.a. onwards. So, it will be better to close all the credit card dues and pay with a single personal loan.
4. Covering the Medical Emergency Bills
Unexpected medical expenses could cost a large amount of money, and if you don’t have medical insurance, it could be a bit more challenging for you to gather cash. An online personal loan for the medical emergency can come to your rescue in such a situation.
5. Relocation Expense –
Yes, if you are moving to another place and relocation expense is giving you a trouble go for a personal loan. You can repay in installments as per your convenience.
6. Unexpected Expenses –
Life is unpredictable, so unexpected expenses can creep anytime. To handle the unexpected crisis, you can avail a personal loan. And, nowadays, there are many personal loan apps, where you can avail a personal loan easily and within quick turnaround time.
Along with the main uses, we also need to highlight the current market interest rate of the personal loan of varied lenders –
|Punjab National Bank||12%|
|Union Bank of India||12.60%|
|Karur Vysya Bank||13.90%|
|Standard Chartered Bank||11.99%|
|Bank of Baroda||11.60%|
|Bank of Maharashtra||12.95%|
|Indian Overseas Bank||12.45%|
Example for an EMI Calculation –
A person availed Rs 1,000,00 as a travel loan at an interest rate of 11% p.a. for a tenure of 2 years.
His EMI for 1 year will be ₹ 8838
His EMI for 2 years will be ₹ 4660
His EMI for 3 years will be ₹ 3273