A sudden and dire need of money can pop up unknowingly in many situations. The need for money can be any – from making ends meet to medical emergencies. Having money at hand makes it possible to go through many such situations with ease. However, there are also times when the requirement of money is not due to an emergency but because of an investment opportunity or any other relevant task.
Since such need for money can pop up suddenly, the question is what can be done in such a situation?
Personal loan comes to fore when there is a need for quick financing without having to risk a personal asset as collateral.
What is a Personal Loan?
A personal loan is a collateral-free (unsecured) loan that is paid back in monthly payments at a particular rate of interest. A personal loan carries no obligations and hence is useful in almost all situations requiring money. They also are quickly disbursed and typically require no documentation for sanctions.
Since personal loans are approved easily and have no obligations as such – it is essential to use them wisely.
Let’s take a look at reasons when taking a personal loan makes sense
1. To Pay for Medical Emergencies
Medical emergencies seldom knock before popping up. Having a shortage of money in such a situation can make things even harder. A personal loan in times of medical emergency can be of immense help.
Personal loans are approved almost instantly and require no documentation. In the event of a medical emergency, the least you need is a waiting time for the credit to get approved.
2. To Renovate or Construct a Home
It is typical of people to get a home loan for activities such as renovation or construction. However, a personal loan makes more sense during home improvement. It carries a lot less paperwork when compared to a home loan and is quickly approved. A personal loan can be used for almost anything. A home loan, on the other hand, can only work for home improvement or construction.
So, with a personal loan you can upgrade your kitchen to a modular one or repaint the whole house – there will be no questions asked. The best part is that personal loan can also help you avail a tax deduction of up to 2 lakhs. If you can prove that the loan you took was for construction purposes, you can avail a deduction under Section 24B.
3. To Pursue Higher Education & Accelerate Career
A personal loan can be used to accelerate your career and give it a new direction. With a personal loan, you can take a supplementary course and improve your skills in the corporate world. It helps in landing a better job while keeping you updated on the latest in your field. Using a personal loan for career goals will pay off in the future. You can also fund a business idea for passive income or attend seminars and workshops around the world to connect with other professionals.
People typically take personal loans for a host of reasons – to travel, to shop and even maintain a certain lifestyle of sorts. However, there are some situations where taking a personal loan can go beyond and help in dire circumstances.
Most financial institutions ask for no collateral or documentation to approve personal loans. The only thing is to make an informed choice when taking a personal loan. Trusted financial institutions like ABFL Direct offer personal loans with a flexible repayment tenure and hassle-free online application process. Remember, be wise and informed.