What is a Personal Loan and When Should You Take One?

Due to the easy availability of personal loan in India, their demand has increased a lot. With just a few easy documents, you can get a personal loan in a few minutes. Whether it's a medical emergency or you want to plan a foreign trip, personal loans can be used for any purpose. In this blog, we will discuss about personal loans and when one should opt for them. Let’s first understand what is a personal loan.

Understanding a Personal Loan?

You may be opting for a personal loan for the first time. So, you may have a question about what is a personal loan. A personal loan is an unsecured loan offered by banks andfinancial institutions. You don’t have to provide any security or collateral to avail this loan.

The loan is sanctioned based on your age, income, employment, credit score, and various other factors. There is no end usage attached to it. Which means you can use the personal loan as per your requirement. This can be a wedding, education, medical emergency, etc. You need to repay the loan with interest as per the pre-determined repayment schedule.

Key Features of Personal Loan

Here are some key features of a personal loan: -

●        There is no collateral required to avail a personal loan. You can get the loan on the basis of your income and other parameters.

●        Personal loans offer flexible repayment tenure. You can choose the repayment tenure as per your convenience.

●        It requires minimal documentation. You just have to submit basic documents like ID proof, address proof, and income proof.

●        If you avail a personal loan for home construction, home renovation, or higher education, then you can get a tax benefit.

●        There is no end usage restriction on a personal loan. You can use it for multiple purposes. This can be a home renovation, wedding, debt consolidation, higher education, etc.

●        Personal loans offer fast disbursement. If you qualify for the eligibility, then the amount will be credited in your bank account within a few hours.

When Should You Take a Personal Loan?

It’s very easy to get a personal loan in India. So does it mean you shall take a personal loan at any time? Certainly, that should not be the case. Here are some scenarios under which one should opt for a personal loan: -

1.Medical Emergency

A medical emergency can occur at any time. This can cost you a lot. At certain times, even your medical insurance is not sufficient. At such times, it is advisable to go for a personal loan. You can get quick money as the personal loan is disbursed fast. Moreover, personal loans are hassle-free, hence you can easily meet huge medical expenses.

2.Wedding

Indian weddings are very grand, which makes them very expensive. To cover all marriage expenses, you need to have enough finances. And in case you don’t have it then you can go for a personal loan as per your requirement. This loan comes without any restrictions. Hence, you can use it for shopping, catering, or buying gifts for relatives.

3.Home Renovation

Home renovation demands huge expenses. At times, renovating the house can exceed your pre-determined budget. You need not worry as you can avail a personal loan at this time. Personal loans are disbursed very fast. Hence, you can avail funds quickly and can use it for renovation purposes.

4.Unplanned Vacation

Everyone loves traveling and wants to go on vacations. But due to financial limitations, people often just dream of this. You can use a personal loan to fulfil your vacation dreams. Apply for a personal loan from any bank or NBFC. The money will be disbursed in your account within a few hours. Then you can utilise the money to travel anywhere in the world.

5.Kid’s Education

Education has become too expensive. There are a lot of expenses involved, like admission fees, tuition fees, books, canteen, transportation, etc. Getting an education loan at times is tough, and it also demands a guarantee. A personal loan is a better option in such a case. You can use a personal loan to support your kid’s education. It can help you to fulfil your kid’s education dream.

6.Buy Gadgets

Technology is progressing very fast. Every month, new smartphones, laptops, and various other gadgets are launched. You don’t have to sacrifice your bank savings to purchase these gadgets. You can apply for a personal loan and buy the gadgets with it.

Conclusion

After going through this blog, you must have understood what is a personal loanand when to use it. With rising fintech startups, getting a personal loan in India has become very easy and convenient. But you should avail it only when an actual need arises.

Some of the popular instances to avail a personal loan include a wedding, home renovation, medical emergency, higher education, etc. You can apply for apersonal loan online as well as offline. You just have to provide basic documents, and the loan will be disbursed within a few hours.