‘Lifestyle’, is a way of life and defines how we live our everyday life, how much we spend and how much we save. Hence, we can say that lifestyle is one of the factors on which your personal finance depends. Though lifestyle varies from person to person and family to family depending upon the upbringing, earnings and the locality in which one lives. Generally, when talking about the lifestyle the sudden influx of posh imagery things comes in our minds. We think of luxury cars, beautiful homes and traveling in the First Class. It is what we have inculcated in our minds. Anyone, whether doing well or not in life, always has a want to enjoy a great lifestyle. But, not everyone gets to enjoy an up-class lifestyle, still, everyone keeps trying and working harder to achieve it.
In general, our lifestyle is expressed via work and leisurely activities and the things we have. Doing so is dependent on our income and finances and the way in which we handle it. However, to maintain a good lifestyle it’s not that easy; as human expectations and desires are never ending and no one is satisfied with what they have, there is always an urge to get more and better. These desires can be multiple such as- getting a bigger home, having a better car, having the latest gadgets and so and so.
For many, having all this and maintaining a decent lifestyle is not possible just with salary and hence they take the help of a personal loan. But what has made personal loans so favourite of so many?
Why Personal Loans?
Personal Loan offers quick and easy access to cash to deal with any kind of personal needs, requirements, and emergencies. To avail a personal loan, the applicant doesn’t need to specify the particular reason of opting for the loan. For education fee to the wedding expense and from home renovation to business or whether it be to travel or a medical emergency, a personal loan can be availed for many reasons. A personal loan is an unsecured loan for which there is no need to give any security or collateral against the loan. Another reason behind opting for a personal loan to maintain a lifestyle is that it is available in no time and widely available from all the banks. Personal loans are now offered online by most of the lenders which make it easy for the borrowers to avail this loan as in today’s world everyone is busy with one thing or the other and with that busy life going to bank again and again and waiting in the loan queue is quite difficult. And as the personal loan can be availed by just filling an online application form and just some clicks on your laptop or mobile application. With the same speed, it is approved almost instantly nowadays and you also get flexible repayment terms with personal loans which make your repayment more affordable.
Purposes for Which a Personal Loan Can be Availed
Personal Loans are quite a popular option for availing immediate financing, and these are the most popular purposes for which personal loans are availed.
- Medical emergency
- For Travel
- To Purchase gadgets
- To repay previous loans (Debt Consolidation)
- To buy vehicle
- To build CIBIL Score
- For the down payment of your home loan
Benefits of Personal Loan
- Easy availability through internet on the banks portal.
- A quick and easy application process as one just need to fill the online application form.
- The processing is fast as the complete process is online such as e-KYC and online documentation.
- Your personal loan is approved and disbursed in your account in a short time.
- Affordable & flexible repayment terms.
- Competitive interest rates.
Who Qualifies for a Personal Loan?
A personal loan can be availed by both salaried and self-employed individuals but the eligibility criteria vary from lender to lender. Taking about Finance Buddha the personal loan eligibility criteria are as follows-
|Age(Min-Max)||23 to 60 years at the time of applying.|
|Minimum Income||₹350,000 p.a.|
|Employment||Full Time with at least 2 years of experience|
|Documents Required||Bank Account Statement/ Latest Electricity Bill/ Latest Telephone Bill/ Latest Credit Card Bill/ Employers letter certifying current mailing address/Passport(Valid)- provided the passport address is present address mentioned in application form / Existing Registered House Lease/ Government I-card with photo|
How can Personal Loans be Helpful instead of being Just another Debt?
Doesn’t matters how easy they are to avail and features they offer, at the end of the day personal loans are just a debt instrument. If availed during the times of need, personal loans prove to very useful and handy. However, if just availed for recreational or unimportant purposes, personal loans can become a debt trap before you know it. So what are the good ways in which a personal loan can be used to improve lifestyle, other than the times of emergencies.
- Purchasing a Vehicle with a Personal Loan: Personal Loans offer more flexibility than two-wheeler loans or car loans, and offer benefits like instant ownership and non-requirement of down payment, apart from being available instantly online. Apart from these, loans for premium bikes and cars, are offered at much higher interest rates, which is not the case with personal loans. Just avail a personal loan and buy the vehicle of your choice at no extra cost, while still having your savings intact.
- Building Good Credit History: If you have had defaulted in the last two years on any of your EMIs, it can be a thing of concern to your future lenders, should you need a higher amount loan. A small amount personal loan for a tenure of 2 years can be taken, which will be low-weight on your pocket and you would be able to repay it always on time. This will help you to build a good credit history while improving your CIBIL Score all this while.
- To Get Rid of Existing all other Loans: Multiple loan accounts and credit cards with multiple EMI payment dates can all become a hassle to manage. Also it saves money to finish some loans as soon as possible instead of carrying them, such as credit card outstanding, bike loans, consumer durable loans. Consolidating debts with a personal loan can make financial life simpler, hassle-free while helping to save up some money on the monthly interest payments.
- To pay for Your Home Loan Down payment: Using a personal loan to pay for expenses such as home loan down payment, registration and stamp duty and other miscellaneous costs. A good home in a nice location on home loan definitely comes at a higher price and hence all other related costs go up proportionally. And yet all these are not the end. Buying a home, is a start of the chain of events which only require more spending: home interior, home decor, furniture and appliances, housewarming party etc. All this can weigh heavy on your pocket in a very short span of time. Instead of finishing up your savings on all these expenses, it makes sense to avail a personal loan to meet all such expenses. Once the spending season is over in year and your budget is back on track, you can prepay your personal loan and just continue with your home loan repayment.
- Investment into Your Child’s Education: Investment into education is the best investment one makes over their lifetime. Don’t let your financial condition hamper the education of your children. Investment in their education will repay you in a much bigger way than you can imagine. Premium schools and colleges both in India and abroad cost a lot. A personal loan can be availed to meet all the extra expenses involved. If your child can get into a premium educational institution, they would have a high paying job in their hands even before they come out of college. Hence one should never shy away from investing in the child’s education.
- Startup Investment: Startups are risky! Most of them do not even see the second year of their life. As such almost no lender is ready to provide financing to them. If you are currently working as an employee but have a startup venture plan on your mind, the best financing option available to you is a personal loan, as no lender would be ready to provide you with a startup business loan. The capital secured through a personal loan can be used to meet initial expenses such as technology, infrastructure, staffing and marketing expenses before you can secure a seed funding for your startup.
If used right, personal loans can be very helpful and contribute greatly towards uplifting one’s lifestyle instead of being just debt on a head-on which needs to repaid every month at any cost. It is up to the applicant what they want for themselves and how do they want their life to be. It is a personal choice at the end of the day.