No matter how well prepared you’re to manage your financial health, certain situations may arise anytime when you might find yourself in a cash-strapped scenario. Resorting to a personal loan in such scenarios is the best option as it offers instant cash at affordable interest rates and flexible repayment tenure.

Although it may seem simple to avail of a personal loan, there are eligibility criteria to meet if you want to get approved for a personal loan. But you may wonder why you would want to get a personal loan and how you can use the personal loan amount.

Reasons for a Personal Loan

Here are a few valid reasons to apply for a personal loan:

1. Debt Consolidation

You can avail of a personal loan for debt consolidation to collate all your outstanding loans and debts into one place to save on interest for multiple loans. It is one of the best ways to get rid of old debts and avail of a single personal loan.

2. Wedding Expenses

The cost of a wedding can exceed all budgetary expectations. However, you can use a personal loan to cover the wedding expenses for your child and repay the amount in easy instalments.

3. Higher Education

When it comes to higher education, every parent wants the best for their child. If you want your child to study overseas, you can avail of a personal loan for higher education to fund the expenses of education, hostel expenses, and living in a foreign country. The same can be utilized for higher education in India too.

4. Home Renovation

If you have been thinking of a home makeover, you may want to spend some money on renovation, expansion, refurbishing, or upgrade of old furniture. A personal loan for home renovation is the ideal choice for such reasons as you can avail of instant funds anytime to get yourself a dream home makeover.

5. Pay for a Vacation

It is the dream of most families to go on a vacation abroad. You can take out a personal loan for a dream vacation with your family. Once you come home with pleasant memories of your vacation, you will be pretty happy to pay off your loan in easy instalments.

6. Medical Emergency

Unplanned expenses can always catch you off-guard and leave you feeling vulnerable, more so when you’re short of funds. A personal loan for a medical emergency is the best respite in such cases as you get access to instant funds following a simple loan application process and have the freedom to pay over time in simple instalments.

How to Obtain a Personal Loan

When you finally decide to take the step and apply for a personal loan, you may get overwhelmed by multiple questions like the application process, rate of interest, EMI, and so on. To simplify things, use a personal loan EMI calculator to pre-empt your estimated EMI and plan your finances better.

A personal loan EMI calculator is easily available on the lender’s site and app. You need to key in your details, and you can find out whether you are eligible or not. You can also see the different factors and the EMI you must pay.

Managing Your Expenses with a Personal Loan

As we have discussed all these points about getting a personal loan, it’s not that difficult to get a personal loan. But you have to be very organized about repaying the loan promptly.

Here are a few tips:

Loan Consolidation

You can consolidate all your loans into a single, monthly commitment, making it easier to track your debt. You can use a personal loan EMI calculatorto track your EMIs in a better way.

Prepay with Your Bonus

If you get a bonus from your job, use some of it to prepay some of your loan amounts instead of blowing it up.

Loan Switching

If you get a better deal, don’t hesitate to switch lenders. First, however, ensure that there are not too many penalties attached to switching.

Cut Down

You can cut down your spending by reducing eating out and ordering in. Let your monthly EMIs take precedence for the duration of your loan.

Focus on High-interest Loans

Pay up your high-interest loans first. Once left with lower-interest loans, you’ll find your loans more manageable.

Increase EMIs With Salary Hikes

Most people get a salary hike every year. So instead of upgrading your lifestyle, put that on hold in favour of increasing your EMIs in line with your salary hike.

Be Prompt with Your Payments

You already pay interest with each EMI you pay on your loan. So don’t increase the outlay by missing payments and paying extra penalties and charges.

Conclusion

A loan is a serious commitment that you need to deal with responsibly. However, if you are financially responsible, you can get a personal loan to make adjustments to your lifestyle and still pay back what you borrow.

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