Published on Jun 17, 2021Updated on Sept 14, 2023
A personal loan is the most versatile loan product, which can be used in meeting any type of financial obligations, whether planned or unplanned.
Falling under the category of unsecured loan, personal loans are sanctioned based on your income, credit score and repayment capability, among other factors. It is one of the most easily available loans that require less documentation.
However, the question of when to take a personal loan always confuses borrowers. The following are the seven top situations to take a personal loan:
Medical emergencies can come up at any time and there are times when your insurance and/or savings may not be adequate to cover the medical expenses. In such a scenario, a medical emergency loan can be the perfect solution.
Also, in many cases, health insurance covers don’t cover certain medical expenses like room rent beyond a certain limit, medical travel, certain procedures, and ancillary expenses. Such expenses can be significant. Taking a personal loan will help you to meet the expenses and not put a strain on your finances.
Gadgets, computers, and electronic appliances have greatly made our life easy and made us more efficient. But, from time to time, we need to replace the devices with the latest models to keep our homes perfect and comfortable for our loved ones.
For example, buying a new refrigerator which is big enough for one’s family, or buying the latest laptop for one’s personal business. Such purchases are not cheap and can drain our savings.
A personal loan will allow you to purchase such appliances and gadgets easily and quickly.
In the last few years, wedding-related expenses have increased significantly. For instance, a simple engagement ceremony can easily cost several months of your salary.
A personal loan can help you to meet all the costs related to your wedding, and repay them in easy instalments. You can calculate EMI according to your repayment capability by using the personal loan EMI calculator.
One of the major benefits of taking a personal loan for such an occasion is, your savings or emergency fund gets saved and helps you to plan your finances in a better way.
Your home needs a little maintenance like repairing minor cracks, upgrading electrical lines or plumbing system, interior and exterior wall painting etc, from time to time.
Such expenses are not small and can easily dent your savings if such activities are not planned.
Taking a personal loan can help you meet the costs and doesn’t require collateral as in the case of a home improvement loan.
Also, if you are planning to remodel your small to mid-sized home, then taking a personal loan for home renovation is the best option.
If you have multiple loan accounts or credit cards due, then you can consider taking a personal loan to clear all your outstanding balances with one monthly payment.
It’s a smart strategy rather than managing multiple loan accounts, which requires greater effort to service. This will help you manage your repayments easily, and you can even save on the overall interest payable. Moreover, timely repayment of a personal loan for debt consolidation will help you improve your credit score over time.
The personal loan interest rate is usually lower if you have a good credit score. Using the benefit, you can also settle a loan account with a higher rate of interest, which can result in significant interest cost savings and help in quicker repayments.
Must Read: How to Reduce Personal Loan Interest Rate?
Many a time, securing an education loan becomes a herculean task due to the stringent terms and conditions. Moreover, an education loan may not include the relocation cost, hostel and boarding cost, etc, which is sometimes a quarter or half of the total educational expenses.
By taking a personal loan, you can easily meet expenses related to pursuing higher education and have repayment flexibility.
If you’re considering an advanced professional certification course on a part-time basis to upskill yourself, a personal loan for higher education can be the best solution to finance your ambitions.
In the last few years, trends of travelling to foreign countries for leisure purposes have grown tremendously in India. But, it requires a deep pocket to fund the costs related to airline tickets, visa fees, hotel and sightseeing expenses.
Taking a personal loan for travel can help you to meet the costs related to travelling abroad and fulfil the dream of vacationing abroad without the worry of high costs.
There are many situations to use personal loan, as far as the loan amount is used in legally defined activities and conforms to the law of land.
Apply for a personal loan online with SMFG India Credit today. Enjoy the benefits of instant in-principal approval* with less paperwork and special offers*.
Was this helpful?
*Terms and Conditions apply. Loans are disbursed at the discretion of SMFG India Credit.