Wouldn’t it be wonderful if we all had enough money to fulfil our dreams and meet every expense that we came across in our lives? Unfortunately, life has its own way of throwing surprises and challenges at us, when we need to borrow money and tide over an emergency situation. If you have ever taken a loan the traditional manner, you would concur that it isn’t an easy process to get through.
Fortunately, the concept of personal loan has changed the way in which we look at loans and the loan application and repayment process has been simplified to a great extent. However, unlike any other loan, personal loans are unsecured and do not
need any collateral and has a quick process and disbursal which endears it to the common man.
Let us understand the top three reasons why taking a personal loan is a sensible decision after all:
1. Debt Management: It often happens that we end up having a number of debts from different sources with varying interest rates and it becomes difficult to pay them. By applying for a personal loan, it becomes possible to pay off various creditors. This narrows the loans down to one single payment every month for a fixed period of time. This is probably one of the best benefits of taking a personal loan.
2. Home Improvement: If you are keen to renovate your home or redesign a portion of it, then taking a home improvement loan or dipping into your savings is an option. However, taking a personal loan and carrying out the repairs or renovation is a much better idea. You can apply from a reputed finance institution or bank and receive the necessary funds in quick time.
3. Paying off Credit card bills or loans: Buying things on a whim or making emotional decisions while at the shopping mall is often due to that credit card in your pocket. If you are unable to pay the credit card bill by the end of the month, it is fine but if you plan to make minimum payments, the principal amount increases and so does the interest amount on it. Taking a personal loan and paying off the outstanding amount along with any credit card loans at high interest, is a prudent decision. The interest rates are much lower and the personal loan helps to keep things under control.
Another method of paying off high-interest outstanding amounts is to carry out balance transfer and move it to a lower interest card. Remember, you should always borrow by considering your repayment capacity. Maintain a good credit score and you should be able to sail through the eligibility criteria without any hassles.