Top 10 Reasons for Taking Personal Loan in India

Personal loans are unsecured loans that can be used for a variety of purposes such as large purchases, consolidation of debts, emergency expenses, and so on.

These loans are typically repaid in monthly installments over the course of two to six years, but it may take longer depending on your circumstances and payment diligence.

Here are some of the popular reasons for availing a personal loan –

1. Clear Credit Card Debt
2. Finance a New Venture
3. Improving Credit History
4. Medical Emergencies
5. Going on a Vacation
6. Wedding Expenses
7. Buying Your Dream Vehicle
8. Financing Big Ticket Purchases
9. Higher Education
10. Home Renovation

1. Clear Credit Card Debt

Credit card debts can be hard on your pocket. With annual interest rates of 40%, this is an expensive debt to carry and if repayment is not made soon, then your credit score will be affected negatively.

As a result, taking out a personal loan with annual interest rates ranging from 12 to 15% is a much better option. You save money on interest while maintaining your credit history.

2. Finance a New Venture

Inadequate funds can put a stop to your dream of starting a new business. A personal loan on the other hand, can assist you in obtaining funds to finance your business. 

Furthermore, one can apply for a business loan, but in that case, you must prove your financial history and tax-related documents, which is not possible for a new business. As a result, a personal loan would be the most practical option to pursue as it is much easier to avail.

3. Improving Credit History

When it comes to loans and credit cards, your credit score is very important. If you do not have a good credit score, a personal loan may be able to help you get one.

Most people apply for small personal loans to improve their credit score by repaying the loan on time to establish a good payment history, which demonstrates to the lender your creditworthiness.

Paying a loan on time will eventually raise your score, allowing you to apply for a larger loan amount in the future.

4. Medical Emergencies

The deterioration of people’s quality of life as a result of lifestyle factors may necessitate the use of medical procedures on occasion. Insurance policies do not cover all medical procedures. 

Certain diseases and treatments that you may need to undergo are not covered by all insurance policies. Medical policy clauses may even require you to pay a certain amount out of pocket. 

In such cases, a personal loan for a medical emergency is one of the best options. The loan amount can be used to cover any medical expenses or therapies that you may require.

5. Go on a Vacation

It is often said, “Life is not a destination to reach, but a journey to be experienced.” Traveling to new locations can often refresh the soul and break the monotony of the routines of daily lives. It is always a financially prudent decision to make regular savings towards such vacation goals; wherein one can aim to accumulate a healthy amount to meet the vacation expenses.

However, in the interim, making advance bookings towards such expenses, especially for flights, hotels, etc., can help you gain a significant price advantage, thereby lowering your overall travel budget indeed. One can take a personal loan for travel to make such advance payments and repaying such loans with regular savings at a later stage.

6. Wedding Expenses

Marriages are made in Heaven but celebrated on Earth. And we all tend to splurge quite a bit on the festivities.

With an intent to celebrate in the grandest manner, marriage expenses can often go off-budget. Instead of facing financial stress about this, one can take a personal loan for wedding expenses and then systematically repay the loan in monthly installments.

7. Buying a New Vehicle

A personal loan is one option for financing the purchase of your dream car or bike, or even a boat. It’s also one way to pay for a vehicle if you’re not purchasing it directly from the manufacturer.

For example, if you want to buy a used car from another consumer, a personal loan will allow you to do so without depleting your savings account.

8. Financing Big Ticket Purchases

One can avail a personal loan to fund any big-ticket purchases like electronic appliances and gadgets eg. laptop, refrigerator, washing machine, etc.,

This is a prudent option as compared to spending large sums in a month A personal loan allows one to defer the large expenses over future months since it is to be repaid in monthly installments in the future.

9. Higher Education

While you may have prioritised your child’s career aspirations and making regular savings towards it, the ever-increasing education costs may cause some deficit towards such financial goals.

One can take a personal loan to bridge such deficit and enable their child to get admission into the desired college and stream, not allowing any financial constraints to alter such goals.

10. Home Renovation

One often spends a significant amount of time with family at home. Getting a home renovated can often be one’s desire, but relatively higher expenses may cause one to push it down the priority list.

In Conclusion

A personal loan can help one make this desire a reality, wherein the home renovation expenses can be funded through such loan to be repaid in monthly instalments.

These are the Top 10 reasons for taking personal loan in India.

Check out Money View Loans for all your personal loan requirements. The process is quick, easy and hassle-free.