Top 6 reasons to apply for a personal loan

Your financial needs do not always appear when you are expecting them. In fact, you may need money at a time when you are least ready for it. In the older days, such times meant that the borrower visited the money-lender. Today, all personal money requirements are met by personal loans. Designed as a quick solution, a personal loan does not ask for any collateral like jewellery, or mortgaging house etc. There may be different circumstances that lead you to shop for a loan. Whatever be the need, getting a personal loan is easy. Let us look at the top 6 reasons why people like you go for a personal loan.

Debt consolidation

Many borrowers have a loan problem. The problem is not in terms of repayment. The problem lies in too many loans. Many loans translate to many EMIs. To avoid this, many apply for a personal loan. A personal loan consolidates all the debt in one single loan, with a fixed interest rate and tenure. In this way, you can avoid the inconvenience of servicing of many loans.

Paying credit card loan

Credit card loans are costly. This is a fact. It could be for shopping or some spending while on an overseas trip. If you spend a lot of the credit card, repayment can be a big problem. With annual interest rates of 40 per cent, this is an extremely expensive debt to carry for long. Hence, using a personal loan, which carries annual interest rates of 12-15 per cent, is a much smart option. You save on interest costs and leave your credit history intact.

Can't ask relatives or family for money

Many borrowers come from well to do families. To them, getting a loan isn't a problem. The problem is got to do with the social pressure of having taken a loan from family. A loan taken from a sibling or a parent can be free i.e. no interest will be charged. However, the relationship may become uncomfortable after taking the loan. Some relatives can publicly talk about lending you money, causing embarrassment. Taking a personal loan from a top financial lender, like IDFC Bank, means nobody knows about the loan transaction. It's a secret.

When buying a home

It's a well-known fact that a home loan covers 80 per cent of the house cost. So, homeowners are expected to pay 20 per cent from their pocket. Plus, registration, legal fees, and other taxes may cost another 15-20 per cent. If you have had to spend your savings corpus for some other reason, you will need a loan to cover these extra funding requirements. Your annual bonus may be enough to repay this small loan, but that bonus is 8 months away. This is where taking a personal loan makes sense. With very little documentation norms, one can apply for a personal loan and get it.

Medical emergency

You may have a solid medical insurance policy but that does not mean you are 100 per cent covered. Hospitalization costs are exorbitant. As it happens, the policy sum assured limit is usually breached due to medical costs. An important surgery that could be life-saving may need you to immediately deposit money at the hospital front desk within 24 hours. When people face such situations, they take a personal loan. With quick turnaround time, applying for a personal loan and getting disbursement can happen within hours when it is an emergency. Thanks to attractive personal loan interest rates, the EMI will be affordable. In this way, your family's health care will never be compromised.

Wedding purpose

Parents save for their daughter's marriage. But with double-digit inflation and other issues, sometimes the marriage expenses corpus is not adequate. For grooms, there is hardly any money saved especially if they are marrying at a relatively younger age. With the cost of weddings today higher than 10 years ago, financial help during marriage is a given. Most people do not ask for money help from family and friends. Instead, they take a personal loan. Taking a good amount of personal loan aids them in using it for marriage expenses, honeymoon trip and for setting up their new place. For borrowers who have a regular stream of income, taking a personal loan for a wedding and repaying the debt from salary makes good sense. Using a credit card or taking a loan from neighbourhood moneylender is an expensive proposition. Instead, apply for personal loan with a tenure of 5 years and slowly repay the loan at your comfort and convenience.