When are Personal Loans a Good Idea?
Are you in desperate need of money? Looked for help from family members, friends or relatives but of no use? It’s the time to look for personal loans from a particular lender that can help you save time when you’re juggling with a lack of money. Personal loans are useful especially when you have an existing debt to repay, specific bills to pay or for other reasons, but is taking a personal loan at such time a good idea? Read the article that highlights certain factors which indicate you taking personal loans at such instances:
1. If you’re juggling to pay your credit card debt
A top reason you may opt for a personal loan is to consolidate and settle your credit card dues. Debt consolidation includes obtaining a personal loan in the value of the amount that you owe on your existing credit cards and using the money to repay your creditors, suitably at a lower rate than the average you consider paying today. Because the Personal Loans have Lower Interest Rates than your credit card, you can save on paying unnecessary interest.
Credit cards often have high-interest rates of around 20% per annum. However, a personal loan is disbursed at the personal loan interest rates ranging between 9%-12% per annum. Hence, it is worthwhile to save on your entire interest payments by securing a personal loan and instantly paying off all your credit card dues.
Similarly, if you consolidate your multiple bills at the same time, you can ease your life by paying one equated monthly instalment to one lender.
2. If you have an expense you can’t defer
You need to pay the tuition fee for your child which recently has gone high. Or you may need to relocate for a new job opportunity, but you don’t have enough savings in hand.
In such instances, getting a personal loan can help you get quick money to settle-off your expenses in no time. While it’ll cost you more than paying upfront, that your fruitful job could outweigh what you will be paying in interest.
3. If your insurance does not cover a medical expense
Availing personal loan isn’t always a good option to cover the costs of a sudden medical expense that has accrued or an upcoming medical expense. But if you have an in-house financing option to avail, you might find a better interest rate terms with a personal loan provider.
Know the in-house rates and terms from your insurance provider before you buy around to ensure you’re getting the most competitive rates you’re eligible for.
4. If you need to spend for your home repairs
Getting a personal loan for your home repairs can actually save you money in the long term. Just because necessary repairs can increase the value of your home, this will increase your net worth too and can get you a better deal whenever you’re interested to sell your home.
5. If you’re juggling to start your business
You have a dream to start your business but lacks of funds is hindering it for not allowing to start with. Apply for a personal loan to fulfill your dream of starting a business. A personal loan offers the flexibility to use the funds at a reasonable rate of interest. You can get the money to establish a business, register it, buy new machines, pay rent of your establishment and salaries to employees etc. To get a personal loan, you need to verify your financial history and provide tax-related documents to your lender.
6. If you have an existing loan to repay
If there is an existing loan for you to pay immediately, you can take personal loans to repay your existing loan well in time, provided you have a good CIBIL score. Banks offer Refinancing Facility for you to settle your existing loan. Refinancing is an option where you get a new personal loan to pay off the loan you already gave in your name. This option holds good if you want to lower your monthly repayments or want to take benefit of a more favourable rate.
7. If you have your daughter’s wedding around the year
Nothing costs more than your daughter’s marriage to take place successfully. There’s a huge expenses related to booking a banquet, organizing a buffet dinner, designer wear to buy and a lot of gifts to buy but the lack of funds obstructs you to do so. Take Personal loans immediately before time that gives you the opportunity to plan your daughter’s wedding in a proper way. Personal loans are disbursed once your eligibility, income and financial creditworthiness are verified. Always choose the lender that offers you reasonable interest rates that suits your pocket.
Personal Loan Interest Rates
Banks or NBFCs disburse personal loans at affordable interest rates to both salaried class and self-employed professionals. One can apply as per their eligibility criteria and submitting the documents. Some of the personal loans for which you can go for are as below:
· SBI Personal Loan : SBI Personal loans are offered at 10.50% rate of interest to its customers.
- ICICI Bank Personal Loan: These loans are provided at the interest rate that ranges between 11.25% — 18%.
- IDFC First Personal Loan : 11.50% rate of interest is offered on IDFC First Personal Loan.
- HDFC Bank Personal Loan: Interest rates provided on HDFC Bank Personal loan ranges between 10.75% — 14.99%
- Yes Bank Personal Loan: 10.85% rate of interest is provided on Yes Bank Personal loan.
- Kotak Mahindra Bank Personal Loan: 10.85% rate of interest is provided on Kotak Mahindra Bank Personal loan.
- Citibank Personal Loan: 11.25 % rate of interest is provided on Citibank Personal loan.
