A personal loan is a popular choice among individuals when cash strapped. This is because personal loans are free of collateral and do not impose any restrictions on the end-usage. But since it is an open-ended and unsecured kind of loan, the interest rates are high. However, it is still one of the best alternative funding options in times of financial need. Moreover, it is easy to avail and the processing is quite quick.
Top 5 reasons why a personal loan is the best option
A personal loan is the best choice for various reasons. Keep reading to find out.
When you apply for too many loans you have to pay too many EMIs along with different interest rates for each. It gets difficult to repay so many loans and keep a track of all the different EMIs. But applying for a personal loan gives you a lump sum amount to meet all your financial needs at once. Thus, opting for a personal loan for financial needs means paying only one EMI and interest rate and makes it easier to keep track of your EMIs. Debt consolidation is the foremost reason for applying for a personal loan.
Medical emergencies always come unannounced. In such situations, even health insurance coverage may fall short and even personal savings may not be enough. Under such circumstances, it is better to opt for a personal loan as it is easy to avail and you can get the required amount within the shortest possible time.
For improving credit score
Having a good credit score is important for your financial future. The credit score is evaluated on the basis of your loan repayments and credit history. If your credit score is low and you want to improve it, then you can simply take a personal loan of a small amount and repay it on time. This will prove you as a creditworthy individual and improve your score.
For financing holiday
A personal loan is one of the best choices if you are planning a holiday with your family or loved ones. Moreover taking a personal loan will help you finance your dream holiday that you always wished for. Personal savings may fall short for your dream trip but you can still fulfill it with a help of a personal loan.
For business expansion
A personal loan is a good option if you are planning to expand your business. There are various financial institutions such as PaySense that offer personal loans to small and medium-sized businesses. If you have a monthly earning of Rs.15000 you will be eligible to apply for such kind of a personal loan and expand your business.
More and more people these days are turning to personal loans to finance their needs due to their hassle-free procedure, quick disbursal, minimal documentation, competitive interest rates and flexible tenure. Almost every financial institution in India offers personal loans. You can compare different banks and their personal loan features and benefits before availing of one.