3 minsJanuary 9th, 2019
Life presents us with occasions where we plan and invest our hard-earned money in the interest of our financial security and to realise our dreams. But haven’t there been times we just cannot move ahead—for various reasons—or even if we do plan well, inflation proves to be a spoilsport?
Basically, the money invested to accomplish a specific goal does not counter the rising cost of living.
In such times, an instant Personal Loan can come to your rescue.
Effectively, a personal Loan provides you easy access to money when you need it the most!
The personal loan is disbursed usually within 48 hours, sometimes even on the same day, if you satisfy the eligibility criteria for a personal loan, documentation is complete, and maintain a healthy credit score.
Here are six situations in life when a personal loan can prove useful:
- Contingency needs
- At times, life throws an unpleasant surprise which could drain our finances. Ideally, you must maintain at least 6 - 24 months of regular monthly expenses, including EMIs as your contingency reserve.
- But if you haven’t planned for your contingency needs, and are in dire need of money, a personal loan can come to your rescue. You need not exhaust your existing finances built over the years and earmarked for specific financial goals. A personal loan by nature is an unsecured loan; which means you do not have to mortgage your existing assets (house, car, investments, etc.)
- Medical expenses
- In the event of a medical emergency, ideally, you and your family member should have sufficient health insurance and/or the financial strength to cope with the medical bills.
- But if you do not hold either of these, you may consider an instant personal loan to foot the medical bills –––with a loan anywhere between Rs 50,000 to Rs 15 lakh, at the best interest rate, and the repayment tenure ranging anywhere from 12 months to 60 months.
- Fulfil your dream vacation
- In the hustle-bustle of our daily life, we all work hard to make a living, and then look forward to spending quality time with family. And many times, a vacation can be full of fun when it is spontaneous. Here’s when a personal loan comes handy and can turn your dream vacation into a reality.
- For wedding expenses
- Prudent savings and investing, of course, helps to plan and achieve this grand occasion.
- But many times, to celebrate the alliance of two souls and families, the wedding expenses cross the budget. Every parent, every family, perhaps, endeavours to see their children wed off in pomp and opulence. After all, a wedding is a significant milestone in our lives as adults.
- If you fall short of funds to meet certain wedding expenses, you need not worry. Today, by availing a personal loan, you can handle almost all the wedding expenses.
- For festival expenses
- India, as you may know, is a land of numerous festivals and cultures. Festivals are even marked as auspicious times to buy assets as a sign of progress and growth – particularly, Gudi Padwa, Dussehra, Diwali, Eid, and Christmas.
- During these festive times, we all aspire to provide our family with all the goodies ––home appliances, gadgets, watches, jewellery, and so on. But at that time, the financial resource could be a constraint. Here’s when a personal loan can come to your support. Today, personal loans are packaged as ‘festival loans’ during the festive season. Festival loans tend to be economical compared to a regular personal loan and other alternatives.
- For home renovation
- Ahead of festivals, weddings, we all aspire to do up our homes aesthetically with elegant interiors. If you are looking out to renovate your home, but have kept the plans on the backburner because of the lack of funds, consider a personal loan.
A personal loan can provide you access to funds, almost for any purpose. To ensure that you get a personal loan almost instantly, do the following:
- Maintain a healthy credit score (Higher the credit score (750 and above) of your credit report, the better it is)
- Do not submit multiple loan applications (It can weigh on your credit score)
- Make sure you have not availed of a personal loan in the last six months (It does not depict a very healthy picture of your personal finances)
- Make sure your EMIs should not exceed 40-50% of your net take-home pay
- Avoid creating a credit card debt (Use it with discipline and pay all your dues on time)
- Maintain a fair balance between secured and unsecured loan (Since it weighs on your credit score)
Moreover, when you take a personal loan, consider your need, not only the eligibility. It is good to be realistic with yourself, because nobody else knows your repayment capacity better than you.
It is pointless to overshoot your budget and not fulfil your EMI obligations later. Missing EMIs repayments can cost you more, owing to a higher interest on default, penalty, late fees, and other auxiliary charges.
As a breadwinner, while you endeavour to do the best for your family vide personal loans, keep your family in the loop—explain the rationale to them— insure yourself optimally. Realistically speaking, in case of an emergency, unexpected incident, or unforeseen circumstances, the insurance money can cushion your family members with financial security and pay for the outstanding loan.
Disclaimer: This article has been authored by PersonalFN, a Mumbai based Financial Planning and Mutual Fund research firm known for offering unbiased and honest opinion on investing. Axis bank doesn't influence any views of the author in any way. Axis Bank & PersonalFN shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.