A personal loan is one of the best options to meet your financial requirements. Simple documentation, no need for collateral and instant disbursal make it a go-to choice for individuals in financial crises. Whereas the moment of sigh is that the personal loan interest rate 2020 has come down heavily.
What is a personal loan?Â
A personal loan is a short to medium term, unsecured loan. Salaried professionals and self-employed individuals can get a personal loan for travel, debt consolidation, home renovation, wedding expenses and medical emergency. Personal loans are unsecured credit extended to meet short-term financial needs. Several factors such as income level, credit history, debt-to-income ratio, repayment capacity etc. are considered to determine one’s eligibility to get a personal loan.
5 Reasons to get a personal loan?
While a personal loan has no restriction on the end use, here are 5 key reasons you should get a personal loan for:
1. Personal loan for debt consolidation
If you have different debts from multiple lenders, it may be challenging and tedious to handle them because each debt would have its own due date and method of payment. Sometimes, because of this inconsistency, you may skip a payment and end up hurting your credit score and paying more interest over time due to higher interest rates.
So, you can consolidate all your debts into one with a personal loan. Get a personal loan to pay off all debts at once and pay only one personal loan EMI in a month. It will not only reduce the efforts made for debt payments but also reduce the interest if you have multiple credit card dues. Credit cards have higher interest rates than personal loans.
2. Personal loan for travel
Everyone wants to travel their dream destination to get a break from a busy life. If you have been delaying your scheduled holiday trip, you can get a personal loan for travel. With a personal loan, you can pay several travel expenses, and then repay the loan in easy instalments.
3. Home renovation
Home renovation is needed by every household. People renovate or repair their houses for different reasons like fixing damages, modernising, painting and adding features. If you have not budgeted for your home renovation or the budget is not sufficient to fund the renovation, availing a personal loan will help you complete the home renovation project. As personal loan interest rates 2020 are attractive, it is the right time to renovate your home.
4. Big-ticket purchase
If you want to buy that sleek mobile phone or furnish your home with designer sofas, a personal loan can help you purchase everything in your Wishlist. A short-term personal loan can be a good consideration for such short-term financial needs. Multiple lenders offer a consumer durable loan for such type of shopping with low interest rates or no-cost EMI.
5. For unplanned expenses
Financial problems affect anyone at some point in life. In such times, a personal loan comes to your rescue to meet unexpected financial needs. You may face financial problems in paying your or your family members’ medical bills, or your daughter’s wedding expenses may be overshooting the budget. You can get a personal loan to cover such expenses and repay the loan in instalments.
A personal loan not only helps you meet financial requirements but also helps you build or improve your credit score if you make timely payments. Banks are offering low personal loan interest rate 2020. If you need the one, it is the right time to get it.