A personal loan is a form of financing that may be applied to meet any kind of financial need. Be it debt consolidation, significant expenditures, or unforeseen expenses, a personal loan can come to your aid. You can either apply for a personal loan with a conventional lender like the banks or opt for modern fintech financing through a loan app. Both the conventional lender and the fintechcompanies have different set of advantages and depending on your needs you can choose the right one.
Traditional banks can offer you higher loan amount but they take longer to process your loan applications. Also, the interest rates charged by traditional lenders is often high. As such, personal loan apps have become a great concept in this entire financial setup. It offers safe and hassle-free speedy/instant cash loans in India within hours. The transperancy offered by these loan apps is also much better as all your loan details are available on the app. Communication powered by technology also makes it easier for you to reach your loan manager through calls or chats. Thus, aloan app is the best alternative for a rapid cash loan in India.
No matter whether you choose a loan app or the conventional lending process, you must analyse what you can do with the loan amount to make its utmost use.
What Are Some Uses of a Personal Loan?
You could seek a personal loan for many reasons. Some opt for a personal loan to upgrade their lifestyle, while some opt to accommodate their financial needs. But to make the most of a personal loan, here are the four things that you can do using a personal loan that will help you save big.
1. Debt consolidation
One of the primary reasons to avail a personal loan is debt consolidation. Interest rates on personal loans are often lower than those on credit cards. You might take a personal loan to pay off your debt if you already have a sizable amount of credit card debt.
Suppose you can pay off several credit card bills with a single personal loan. In that case, this credit card refinancing technique may cut your interest payments and save you money and make debt repayment much simpler. Instead of having several payment plans with several creditors, you would have one monthly payment.
Personal loans can be utilised to repay off any other high-interest debt you may have as well. A personal loan can also combine many types of debt into a single, easier-to-repay loan.
2. To pay for medical costs
Being hospitalized or dealing with an unexpected sickness may be pretty expensive, especially given how much deductibles for health insurance policies have increased in recent years.
A personal loan can be the solution for people who struggle to pay their medical bills. You can use a personal loan app to get an instant loan approved (subject to meeting the essential criteria), quickly get the care you require and gradually pay back your medical debt.
3. Home improvements to be made
You might need to renovate your house or make repairs, which can be challenging if you have not planned it in advance. A sudden natural calamity or a disaster like fire outbreak in the house can leave you with an urgent need to renovate the house.
You can apply for a home/mortgage loan or line of credit, which often have lower interest rates than personal loans. If you use the funds from the loan for home upgrades, the interest on a home loan may also be tax deductible. However, if you don’t want to put up your home as collateral then you can go for a personal loan.
The loan processing is much faster when you opt for a personal loan availed through a loan app. Also, the documentation process is minimal and you can use the loan amount in any way you deem fit.
4. To Respond to an Emergency
Unfortunately, many individuals need an emergency fund, so they’re unprepared to act when they suddenly need funds. Emergencies happen much too frequently. You can put your emergency expenses on your credit card, but acquiring a personal loan can be considerably cheaper.
Additionally, your personal loan will be repaid on a predetermined schedule in line with the conditions you set with your lender, unlike credit card debt, which might take years to clear if you pay the minimum. Since most personal loans have three- to five-year payback terms, you will know precisely how long it might take to repay your debts.
Conclusion
A personal loan can be availed to accommodate any kind of financial needs. However, you must be very cautious while availing a personal loan. It is a debt instrument and your EMI would affect your monthly budget for months. Not to forget the interest on the loan, which means you will always end up paying much more than what you borrowerd.
But there are a few instances when a personal loan makes sense. Personal loans are a great way to pay for big purchases and consolidate debt. You can apply for a loan through an online loan app, and based on your eligibility; you may receive the loan amount of your choice.