When to use a personal loan effectively ?

effective use of personal loans

Life brings us various occasions where we prepare, plan and put our hard-earned money towards our financial stability and security for a better future. But in everyone’s life there have been times when it’s difficult to move ahead due to various reasons (personal or professional), and it can also happen even when we do execute our plans well efficiently, soaring prices act as a spoilsport. In most cases, the amount invested to achieve a specific goal is not enough to counter the rising cost of living.

When times are tough, a personal loan is the most viable solution to rescue someone in need, as it provides easy access to money in a short span of time. On an average it takes around 24 – 48 hours or even lesser to get a disbursal on your personal loan depending on a borrower’s credit score. If a borrower has a good score and is prompt with the documentation satisfying the eligibility criteria, they can get their personal loan disbursed in less than 24 hours. With such an ease of access and added benefits, personal loans are the most favored choice for most of the borrowers.

In case you are facing a complex situation with your finances and not able to find a way out, here we have discussed various scenarios where a personal loan is the most ideal solution.

Contingency – once in a lifetime

At times, life throws an undesirable surprise which could drain our finances. Ideally, an individual shall make arrangements to at-least 6 – 12 months of their monthly expenses, which shall also include the monthly payments like EMIs as one’s contingency reserve. However, it gets difficult at times for most people to save over and above their budget and maintain a contingency fund, in such a scenario a personal loan can come to your rescue and you wouldn’t need to exhaust your existing finances.

Medical expenses

A medical emergency is something which is mostly unexpected and unpredictable, to prepare for such a situation, ideally, most people take sufficient health insurance for themselves and their immediate family members which provides financial support to pay up medical bills if needed. For those who do not have a medical insurance cover, it can be really tricky and might drain all your savings. In such a case, one may consider taking a personal loan to foot the medical bills.

Fulfill your dream vacation

With all the hustle in our daily routine, most of us work hard enough to make a decent living, and also need to relax and have a good time with their loved ones and the family. If you are someone who likes to go on short weekend trips or long vacations once or twice in a year, it gets heavy on your pocket with all the expenses associated with traveling like transportation, hotel stay or an entire tour package. Even if you plan a little early, you can easily apply for a personal loan which can cover all the expenses associated with your travel.

For wedding expenses

A wedding comes with its own fills, thrills and bills. Most partners these days look to bear the responsibility themselves and that too equally. If planned well in advance with prudent savings and investments in place, it might not be enough to bear all the expenses and would just hamper your savings in the longer term. As a wedding is a significant milestone, the partners, parents and relatives all wish to prepare for it lavishly and with exclusive pomp and show. A personal loan for wedding enables a couple to pay for everything they wish for, keeping their savings intact.

For festival expenses

Our country, as we all know, is a land of numerous festivals and cultures. Most of these festivals are treated as auspicious days and people prepare for these festivals to start new propositions or to buy new things for themselves or their family. Occasions like Dhanteras, Diwali, Gudi Padwa, Christmas or Eid are the days when most people are on a buying spree.

During a festive season, most of us aspire to provide all the goodies to our family whether it’s a home appliance, gadgets, jewellery, and more. It is quite inadvisable to consume one’s savings in order to buy such things, as most lenders provide packaged personal loans deals meant for such festivals. With added offers & discounts, these loans tend to be cheaper as compared to the usual personal loans.

For home renovation

Most of us wish to have a home that should give an aesthetic feeling and comfortable interiors, after a hectic day full of work and travel, home is the place where a person looks for a congenial feel. Ahead of major occasions like festivals or weddings, most people look for options to get their homes renovated but at times have to let go due to lack of funds. In a situation like this, a personal loan can come to your rescue.

To sum it all

A personal loan can prove to be really helpful at the time of a dire need and when an individual is short of options to get access to funds. To avail funds in a lesser time without any hassle one needs to maintain a good credit score (750 and above) and the same can be done effortlessly by just making sure that you pay your credit card bills and EMIs on time for every loan or credit availed.

Moreover, while taking a personal loan, one should consider the need at that point instead of availing the entire eligible amount. Being a little more realistic with your income and expenses might help you plan your finances better in the longer run.