Top 5 Financial Reasons To Avail A Personal Loan

The purposes of availing personal loans may include financing a large purchase, consolidating debt and covering an emergency expense. Instant Personal loans are generally unsecured and are repaid in monthly instalments with accrued interest. Modern financial institutions are evaluating the creditworthiness of loan applications, among other factors, to arrive at the interest rate. Borrowers should always critically evaluate the purpose of a loan to determine the actual need to borrow and whether if they have the ability to cover the payments.

1. To Refinance Existing Debts

Many unsecured personal loans are extensions of debt consolidation loans taken out for the singular purpose of aggregation of current loans or lines of credit into a single loan, frequently at a lower interest rate.

2. To Finance a Large One-off Purchase

Reputed credit card companies are offering personal loans to credit-worthy individuals. The loans terms such as interest rate, loan amount and tenure can be calculated on the instant personal loan app that is available on their respective websites. Top financial institutions are offering unsecured personal loans as a perfect financial solution for a major one-off purchase.

Following Are Some Examples Of One-Off Purchases:

Transportation: If you’re planning to purchase a brand new car from a dealership, you’re most likely to get a decreased interest rate and smaller monthly payment schedule with a secured vehicle loan. Private-party financial transactions are gaining ground on the car repurchase market. An unsecured personal loan fulfils the cash needs of a private party transaction, which conventional lenders like banks will be reluctant to finance directly.

Home Improvement: An unsecured personal loan is a perfect option to qualify for a line of credit or secured home equity loan. Kitchen renovation requires a lot of funds and need to be done on an immediate basis. You can use the proceeds of the loan to pay for the kitchen-related purchases made on credit card or debit card which is connected to the funding account, on the condition that you pay the credit card balance in full every month.

To Finance a Wedding

A wedding in the family is a one-off event only on paper. It’s a different ball game compared to a planned remodel or home repair. That’s because a wedding demands many months of preparation planning. In major cities, the venue and catering reservations need to be completed in a year or more in advance.

If you were getting married today, you are seriously recommended taking out a personal loan before making the first major wedding-related purchase. You can set up a separate checking account to keep the loan amount and disburse its monthly payments for wedding-related expenses. A longer-term loan of around 60 months would be ideal for keeping the repayments of the personal loan manageable and guaranteeing that the loan’s balance amount does not prematurely deplete.

Final Takeaway

Personal lenders are anxious to approve your loan applications as soon as they come. As long as you fulfil the basic income and credit qualification, and if you’re willing to be flexible on the quantum of the approved loan, the chances are excellent that you’ll find a lender who is willing to approve your loan applications.

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