Are personal loans good for you?



More often than not, certain life events can prove to be quite expensive for us. In such a scenario, there are several forms of secured and unsecured loans that you can easily avail. While home loans, auto loans etc fall under secured loans, credit cards and personal loans are some forms of unsecured loans. Each type of credit serves a purpose - whether it’s to meet a financial emergency or to help you invest in assets when you fall short of finances or even fund life events. Personal loans are borrowed money that you can use to meet large expenses - sometimes unforeseen, sometimes planned and even, emergency expenses.

A general misconception that floats amongst a lot of people is that personal loans are not a good option, mainly because they are given out at a relatively higher interest rate in comparison to other forms of credit. But personal loans can prove to be good for you, if and when borrowed for the right reasons. These loans are usually repaid between a period of two to six years in the form of easy monthly instalments and you need a credit score of over 700 to be eligible to apply for one. So, if you are someone who is in dire need of credit, personal loans may not seem as frivolous as an option than they are made out to be.

Let’s look at a few circumstances where applying for a personal loan is a good idea.

Debt consolidation One of the most common reasons to opt for a personal loan is to usually pay off credit card bills or other debt that is charged at a very high rate of interest. Carrying multiple credit cards or outstanding loans with different rates of interest is a recipe for financial trouble and in a scenario as such, it makes sense to apply for a personal loan; and when you do so you are combining all the outstanding balances into one monthly payment. This grouping of debt makes it easier for you to pay off your balances without too much hassle.

Medical emergencies Medical expenses are also a significant reason for someone to apply for a personal loan. Some medical treatments and procedures can be costly and usually, most medical expenses are unforeseen. While your health insurance plan can come to the rescue, there are situations when your coverage isn’t enough or doesn’t cover your ailment. When the medical bills sum up to a large amount and you are short on funds, it is a viable option to apply for a personal loan. Since these emergencies are time sensitive, there are various options to get instant personal loans from a variety of lenders online today. Know more about it here.

Home renovations Home remodelling is a fairly expensive affair and even with a lot of planning, there can be certain unforeseen expenses. So it is a good idea to apply for a personal loan if you are thinking of remodelling your home. It’s simple and easy to apply and avail of a personal loan since there is no collateral to be put up from your end and you can repay the loan in easy monthly EMIs.

Weddings Indian weddings are an extravagant affair and people usually don’t hold back from spending on food, decor, clothes, music and other wedding expenses - this is mostly because a wedding puts your reputation on the line. A typical Indian wedding consists of at least 200 people and in most cases this just covers close family and friends. Hosting a party of over 200 people can be quite expensive and you can turn to a personal loan to rescue you from those expenses.

Travel Before the pandemic put a damper on everyone’s travel plans, availing a personal loan for taking a vacation was quite the trend. In fact, it is considered quite a good idea to not splurge all of your savings on one vacation and pay off the travel expenses gradually with a personal loan.

Big-ticket purchases like consumer durables Personal loans can come in handy when you want to buy expensive electronic items like refrigerators and laptops and your pocket doesn’t allow it. You can always opt for a personal loan to purchase big ticket items and pay for them in smaller monthly installments.

If you’ve already availed a personal loan, here are a few steps in which you can pay it off faster -

Opt for a shorter tenure so it doesn’t burden you for a long period of time. Go for a longer tenure only if you can’t afford to pay higher EMIs. Pay a higher EMI amount if possible, as it can help you repay the debt quickly Don’t delay or skip your monthly EMI payments, ensure you are diligent in repaying the loan. If you can, save up and pay in bulk once every few months to reduce the principal amount of the personal loan.

Want to know more about personal loans? Use our personal loan calculator to get an estimate of your Equated Monthly Installment (EMI). No charge!

What can Finwisely do for you? From helping you compare and understand your options and recommending financial institutions that will best suit your needs to walking you through the process of applying for a personal loan, Finwisely can play an important role in helping you meet those large expenses. Apply for an instant personal loan in easy steps on our website, today! Finwisely is an end to end solution that understands your financial needs and gives you the personalized attention you deserve.

Feedback from client Just add a point on minimum credit score needed to get a personal loan sanctioned.

Also, the reader can apply online for a PL on our website. We can add a link to the application instead of contact us.

Across all articles when we are influencing the reader to apply for a product, we should include the top 4 banks that we want to promote subtly.

Siva - Can you pls reconfirm top 4 bank names and minimum credit score that we want to target for all product categories?

Original Content: More often than not, certain life events can prove to be quite expensive for us. In such a scenario, there are several forms of secured and unsecured loans that you can easily avail. While home loans, auto loans etc fall under secured loans, credit cards and personal loans are some forms of unsecured loans. Each type of credit serves a purpose - whether it’s to meet a financial emergency or to help you invest in assets when you fall short of finances or even fund life events. Personal loans are borrowed money that you can use to meet large expenses - sometimes unforeseen, sometimes planned and even, emergency expenses.

A general misconception that floats amongst a lot of people is that personal loans are not a good option, mainly because they are given out at a relatively higher interest rate in comparison to other forms of credit. But personal loans can prove to be good for you, if and when borrowed for the right reasons. These loans are usually repaid between a period of two to six years in the form of easy monthly instalments. So, if you are someone who is in dire need of credit, personal loans may not seem as frivolous as an option than they are made out to be.

Let’s look at a few circumstances where applying for a personal loan is a good idea.

Debt consolidation One of the most common reasons to opt for a personal loan is to usually pay off credit card bills or other debt that is charged at a very high rate of interest. Carrying multiple credit cards or outstanding loans with different rates of interest is a recipe for financial trouble and in a scenario as such, it makes sense to apply for a personal loan; and when you do so you are combining all the outstanding balances into one monthly payment. This grouping of debt makes it easier for you to pay off your balances without too much hassle.

Medical emergencies Medical expenses are also a significant reason for someone to apply for a personal loan. Some medical treatments and procedures can be costly and usually, most medical expenses are unforeseen. While your health insurance plan can come to the rescue, there are situations when your coverage isn’t enough or doesn’t cover your ailment. When the medical bills sum up to a large amount and you are short on funds, it is a viable option to apply for a personal loan. Since these emergencies are time sensitive, there are various options to get instant personal loans from a variety of lenders online today. Know more about it here.

Home renovations Home remodelling is a fairly expensive affair and even with a lot of planning, there can be certain unforeseen expenses. So it is a good idea to apply for a personal loan if you are thinking of remodelling your home. It’s simple and easy to apply and avail of a personal loan since there is no collateral to be put up from your end and you can repay the loan in easy monthly EMIs.

Weddings Indian weddings are an extravagant affair and people usually don’t hold back from spending on food, decor, clothes, music and other wedding expenses - this is mostly because a wedding puts your reputation on the line. A typical Indian wedding consists of at least 200 people and in most cases this just covers close family and friends. Hosting a party of over 200 people can be quite expensive and you can turn to a personal loan to rescue you from those expenses.

Travel Before the pandemic put a damper on everyone’s travel plans, availing a personal loan for taking a vacation was quite the trend. In fact, it is considered quite a good idea to not splurge all of your savings on one vacation and pay off the travel expenses gradually with a personal loan.

Big-ticket purchases like consumer durables Personal loans can come in handy when you want to buy expensive electronic items like refrigerators and laptops and your pocket doesn’t allow it. You can always opt for a personal loan to purchase big ticket items and pay for them in smaller monthly installments.

If you’ve already availed a personal loan, here are a few steps in which you can pay it off faster -

Opt for a shorter tenure so it doesn’t burden you for a long period of time. Go for a longer tenure only if you can’t afford to pay higher EMIs. Pay a higher EMI amount if possible, as it can help you repay the debt quickly Don’t delay or skip your monthly EMI payments, ensure you are diligent in repaying the loan. If you can, save up and pay in bulk once every few months to reduce the principal amount of the personal loan.

Want to know more about how you can apply for a personal loan? Get in touch with Finwisely to get your first consultation. No charge!

What can Finwisely do for you? From helping you compare and understand your options and recommending financial institutions that will best suit your needs to walking you through the process of applying for a personal loan, Finwisely can play an important role in helping you meet those large expenses. Finwisely is an end to end solution that understands your financial needs and gives you the personalized attention you deserve.