When to Apply for Personal Loan: Marriage, Education, Debt Settlement, Medical Emergency
Emergency or bad time comes in everyone’s life, in fact it is part of life. And during such tough time, people take help of their friend’s or relatives to fulfill their need of money after all the options available with them are utilized. However help from others is not always possible and to meet the demand, personal loan can be your companion as it is easiest way to rescue yourself and gets you quick cash. However you should be careful while opting for this loan as even though it is easy to get, it comes with high interest rate (between 15%-30%) because lenders do not ask for any collateral or security and documentation required are minimum. And most importantly, you get money fast. The reason for taking this loan should be justifiable.
Here are few circumstances when you should get personal loan:
- Marriage: An average middle class wedding in India costs no less than 6 lacs and the number further rises when marriage is taking place in metro city. Arranging this big amount is always a challenge unless and until you have big savings or personal assets to support the funds. However if none of the option is available (which is very common for most) then you should get personal loan. If you are thinking of utilizing all your savings, then give a double thought. Because ultimately you will end up losing everything in one go and later if any emergency arises or even for your day to day normal expenses there won’t be sufficient funds available. So objective should be to maintain the balance by carefully evaluating the necessary amount required, taking into consideration other financial obligations such as various expenses or bills, other loans, child’s education etc. so that all your future needs can also be fulfilled. Check out cheapest personal loan in India.
- Medical Emergency: During medical emergency too, you can apply for personal loan. It’s an undeniable fact that you will have to face medical emergency once in the lifetime. Be it yourself or your family member. Even if you have taken health insurance there are some exclusions and not all expenses are covered by the insurance. Moreover, the hospital where the treatment is going on is not under the network list then you will have to initially shell out money from your pocket and then get it reimbursed which is again a time consuming task and claim amount may not be paid fully as insurance companies have various terms and conditions and they take every effort to reduce their losses by providing various reasons and reimburse less money. So taking a personal loan for medical emergency is highly recommended. Even if you think of using credit card for withdrawing money from ATM then remember that it carries a fee.
- Education: If due to some reasons you are not able to get education loan then there is no alternative other than taking personal loan especially when education is going to happen in countries like USA, UK, Australia or others where expenses are very high. But prefer taking personal loan for professional courses as they last for few years so that repayment can be done immediately after completion of the course. If loan is taken for graduation then the tenure will be long because graduation course typically lasts for 4 years. Another reason for taking personal loan for education is the returns you get after your education. And if you are in US, then repayment of loan which is in INR will not be a big challenge. Read more on personal loan for low income earners.
- Debt Settlement: When you are in debt either due to loan or credit card then personal loan is a good solution to go debt free in shortest time frame. For e.g. if you solely rely on credit card for most of your expenses be it large or small then you might come across a situation when you do not have sufficient funds to repay the card bill. In such cases, you can opt for personal loan to settle the amount. But do this only when amount is very high e.g. above 2 lacs. Because the amount of time for settlement of debt through personal loan would be less compared to paying minimum amount in which you will have to keep paying the amount for years. Similarly if you have taken for e.g. if you have borrowed money from a financer then higher interest rate would be charged by him compared to bank. So to reduce this loss and pay-off the debt quickly, you can take help of personal loan.