Personal Loan Uses
Personal loans can be a great way to expand your business, finance a new home, or pay off debt, etc. Customers get the flexibility to use the funds they get from personal loans freely. So they can use it for multiple purposes at the same time.
It is an unsecured loan that can be availed at any bank, private institution or NBFCs (Non-Banking Financial Companies). You don't have to pledge any assets as collateral to get funds from this loan. However, you'll have to pay a small amount as interest rate every month.
A personal loan is the best choice if you're looking to get quick fund assistance. There are a lot of services/benefits that can be gained by applying for a personal loan.
We've mentioned some of the common benefits below -
- Money is available right away:
You can instantly get funds after your documents are verified. But the process is a lot quicker and easier when compared to other loan options. - Personal loans are a proven way to build your credit:
If you have a bad credit score, then you can use this loan as an opportunity to increase your credit score by repaying the instalments on time. - Personal loans are one of the cheapest sources of borrowing money:
The HDFC Bank Personal Loan interest rate is pretty reasonable and affordable. It is comparatively lesser than other loan options. So you can easily get funds in the cheapest way without pledging any asset. - Personal loans are a solution for emergencies:
You don't have to use your savings to meet fund requirements in emergencies. You can simply get funds by applying for a personal loan.
Borrowers have to repay the amount they've borrowed along with the interest rate within the loan tenure. Missing even a single instalment can affect credit scores negatively. And if the borrower can't repay the loan amount, then the credit score will decrease heavily. A bad/low credit score will make it hard for the borrower to take a loan in future. So you can use some online tools like a Personal Loan calculator to check your repayment capacity.
However, banks don't monitor the end usage of the funds given through personal loans. So you can use the funds you get through a personal loan for various purposes.
Some of the common uses of personal loan are -
- Debt consolidation:
You can use the funds you get through a personal loan to repay your debts, loans and credits. So if your debt collection date is near and you're in short of funds, then you can easily apply for a personal loan facility and get funds through it. - Home renovation:
We all need a change in scenery. Our scenery plays an important role in improving our productivity. And during this pandemic, everyone has been working from home. So you can apply for personal loan and use the funds you get through this loan to renovate your house. - Refinancing:
This means that you can apply for a loan to pay your existing loans. So you can use the funds you get through a personal loan to repay your existing loans. - Medical Bills:
The pandemic is spreading crazily. And the hospital bills are getting expensive day by day. So to pay your current medical bills, you can easily apply for a personal loan and repay the money using the flexible repayment method. - Wedding:
Weddings are a huge deal in India. It is the most momentous occasion. So if you're looking for funds to meet your wedding expenses, then you can apply for a personal loan and get funds through this loan. - Vacations:
We all need a break from this stressful reality. So to take a break, you can easily plan a vacation. You don't have to use your savings to pay all the expenses. You may quickly apply for a personal loan and receive funds as soon as the verification procedure is through. - Miscellaneous expenses:
You can apply for a personal loan if you're finding it hard to manage your current expenses or bills.
Conclusion -
There are a lot of banks, financial institutions and NBFCs that provide the facility of personal loans. So it's important to compare all the banks and then choose an ideal personal loan according to its interest rate, eligibility criteria, charges and repayment capacity.
Also Read:- What A Personal Loan Costs You
