A personal loan is an unsecured loan and a quick way to gather funds for any purpose. Though it comes with higher interest rates, it has its own advantages over others. You should know when is the good time to take a personal loan?
In an unforeseen future, we may never know what problem the life may throw at us. Most of the time, it is the immediate fund that could get us out from that situation. Whether it is medical, gathering funds for marriage or any other personal emergency, a personal loan is the best source to get funds for such situations.
Paying for large purchase
A personal loan can be taken for making a large purchase like an electrical appliance, gadgets, vehicle, furniture etc. Sometimes it is difficult to gather a large sum of money to pay in lump sum towards any purchase. A personal loan can be taken in such a case while you can manage to pay the amount in the form EMIs later.
To repay a loan with higher interest
If you have an existing loan for which you are paying a higher interest rate, taking a personal loan to repay it, is an intelligent decision. If you have a long credit card due for which you are paying a huge interest you can take a personal loan to clear your credit card dues and thus reduce your interest burden.
Investment opportunity or Business expansion
You can use the personal loan amount for expanding your business after analyzing the possible returns that you will get.
You can also use the loan amount for any investment opportunity if you expect it to give returns higher than the interest rate on the personal loan. But in this case, take a personal loan only if you are pretty sure of getting much higher returns than what you are paying for your personal loan.