4 Reasons Why You Should Apply for a Personal Loan

In the event of a financial emergency, applying for a personal loan is the best way to get quick cash. One of the significant reasons why several people prefer applying for a personal loan is that the lenders have no restriction on the end usage of the borrowed amount. Besides, because of its unsecured nature, personal loans have minimal documentation, and you get instant approval.

So, why should you opt for a personal loan? Here are four compelling reasons:

Consolidation of debts

If you have multiple debts like outstanding credit card payments, home loan, vehicle loan, etc. managing the multiple EMIs can be expensive and challenging. In such a situation, you can opt for a personal loan to consolidate your debt and pay a single EMI every month. It will not only help you manage your finances better but also bring a sense of stability to your monthly budget.

Medical emergencies

A medical emergency can occur at any time, and often the treatment for certain illnesses requires funds even if you have insurance coverage. If you do not have enough savings, a personal loan apply can give you the funds needed for the treatment within a short time. Today, several lenders offer same day loans, and the amount is credited within 3-4 hours of approval.

Improve credit score

The credit score of an individual reflects their creditworthiness, and it is calculated based on the promptness in repayment of the outstanding debts. When you apply for a personal loan for a small amount and repay the EMI consistently, over a period, your credit score will automatically improve.

Avoid late payment

All bills, including credit card dues and utility bills, must be paid within a specific time. If you fail to repay the dues on time, it not only leads to a hefty fine but also it has a significant impact on the overall repayment history and the credit score. In some cases, late payment can raise your interest rate. To avoid this situation, you can apply for a personal loan and get the funds to settle all your bills at once and repay the loan in small EMIs over a longer duration.

A personal loan can be used for any purpose you want, and it is not limited to the reasons mentioned above. But, no matter what you must pay back the loan eventually along with interest. So, make sure that you use the funds responsibly and always have a repayment plan before applying for the loan.



DISCLAIMER

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.