The demand for personal loans is increasing among people day by day. The increasing cost of living as well as wide and easy availability of personal loans is the main reason for this.
Personal loans are unsecured and have the potential to meet your financial emergencies, and can pay you for significant purchases by making cash available to you.
However, there are several other reasons which made people opt for a personal loan these days. let’s have a glance at them.
7 Reasons why more People started opting Personal Loan
With regards to health-related crises, there are a few costs that protections plans don’t cover, and these costs can mount quicker than one can envision, on the off chance that they are underinsured or uninsured. In such cases, many people think that it’s best to depend on a Personal Loan to meet these costs. As medical emergencies such as surgeries and major illnesses cost a lot.
Debt consolidation is one of the most common reasons to opt for a Personal Loan in today’s date. Debt traps are common and everyone among the 7 people you meet is trapped in debt.
Personal Loans are a bit expensive with interest rates ranging from 10-22% per annum, but still, they are way cheaper than the Credit Cards which accrue an interest rate of over 30%. Along with this, you get enough time to repay the personal loan as it comes for a tenure period of a maximum of 5 years.
Taking a personal loan is also beneficial when you have more loans on you, in that case, you can repay all other loans by taking a personal loan. This way your monthly payable EMI is reduced.
Improving Credit Rating
A low credit score is a reason of worry for most of the people, as it affects your creditworthiness for your future borrowing.
Personal Loans are a great financial tool to improve their credit scores. People with no or poor credit scores can take a Personal Loan of the small loan amount, and timely repayment of the same can boost in their credit score within a few months. But when one opts for a personal loan, for this reason, he/she can not afford to default on the repayment as any delay can result in fall of CIBIL again.
Funding New Businesses
Getting approved for a business loan that too for a new business is a tough task. You need lots of documents and certain criteria to be met, in terms to qualify for a business loan. Due to these factors, most of the new businesses have to face rejection when they apply for a business loan. Hence, in this case going for a personal loan is the best option, you don’t have tough eligibility criteria and at the same time, there is no restriction on the use of money borrowed.
India is known for its big fat wedding. And moreover, people take their family wedding on their financial status. From wedding costumes of the bride & groom to the gifts & hosting a luxury party, it needs lakhs of money. Hence, some kind of shortage of money is not a big deal. Asking for help from relatives & friends is one of the most common things which most of the people preferred previously, but nowadays things are changing and taking a personal loan is one of the solutions to such a situation.
Time has changed, things which used to happen once in a while has become a trend now a days, and traveling is one among such.
Traveling has become a trend these days, people travel frequently to explore new places and to take a break from their daily routine life. And some even prefer to take a personal loan for this. As personal loans are easily available and have flexible repayment options.
Advanced mobile phones, play stations, upgraded laptops, home apparatuses have turned out to be to a greater extent a need than an extravagance. These have become the temptation and most among the youth want to have them. All this makes the personal loan a great choice which can make your dream gadgets available to you in no time.
The number of personal loan borrowers is increasing, it may be due to dreams or certain obligations. But here we should always remember that- borrowing is never fun. When you borrow money you are bound to repay much more which is along with the interest. Hence, always think twice before you decide to borrow and try to avoid until & unless it is very important and you don’t have any option than borrowing money.