How Personal Loans Help You in a Cash Crunch - Loan Trivia


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Wednesday 28 October 2015

How Personal Loans Help You in a Cash Crunch

Whether you require funds for property renovation, medical expenses or even a vacation, personal loans can be used for a variety of purposes. Some of the common reasons for applying for personal loans are -

a. Home Improvement - When you need cash for home improvement projects or for remodelling your home, taking a personal loan could help you finish your project and also pay off your loan quickly.

b. Vacations - Replacing the pressure of a short-term credit card payment with easier repayment options is a reason why personal loan works best for financing your holiday or vacation.

c. Medical, Educational or Personal Expenses - Personal loans also help you fund your educational expenses, cover your medical bills or even finance personal interests like weddings.

d. Improving Credit Score – Are you’re wondering - ‘why do I need personal loan even if I’m not pressed for cash?’ You need to know that taking a short-term personal loan and repaying it in time can boost your credit score. Paying off a personal loan can build your credit and help you with future loan applications.

Benefits of Personal Loans

Now that you know when to apply for a personal loan, here are a few pointers on why a personal loan is the easiest option when you are in need of financial aid.

a. Flexibility of Usage - The best feature of a personal loan is its flexibility in the end usage of the funds. You can invest money from the loan wherever you like.

b. No Collateral – Generally lenders do not require any collateral, security or guarantors for personal loans. Lenders look at your income and continuity of employment or business to gauge your ability to repay the loan. Hence, there is minimum documentation required for a personal loan.

c. Big Loan Amounts - Depending on the borrower’s ability to pay back, lenders offer loan amounts ranging from INR 10,000 up to 30,00,000. This makes it easier to finance your big-budget plans.

d. Easy Repayment Options - The tenure of most personal loans range from 12 to 60 months. You could repay the loan in EMIs. You could also prepay the loan before the tenure. Some banks levy a prepayment charge.

During a cash crunch, a personal loan could come to your rescue. However, personal loan rate of interest are often higher due to their unsecured nature. So, don’t forget to compare prices and rates before you choose a suitable lender for your personal loan.

Using Personal Loans to Improve your Finances

A personal loan is an effective way to help you out in a financial emergency. If you are asking yourself, ‘Why are personal loans good?’ Then the simple answer is that they are one of the easiest options you can take during a financial crisis. High flexibility, easy repayments and swift approval are just some of the advantages of personal loans.

Whenever you’re in need of immediate monetary assistance, opt for a Personal Loan to help you sail smoothly through any financial crisis.

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