The finance and banking sector in India has witnessed drastic changes in recent years. Nowadays, you can simply avail personal loan via a hassle-free online application procedure. This is a multi-purpose loan, and thus the loan proceeds can be utilized for various purposes. Additionally, as this is an unsecured loan, you do not require offering any security or collateral while availing of this loan proceeds. However, if you are looking for the best personal loan through lenders like L&T personal loan or HDFC bank, Tata Capital etc., ensure to use the loan proceeds wisely.
Read on to know the top eight smart ways to use personal loan –
Debt consolidation
Debt consolidation is one of the smartest ways of forming a stable and healthy financial future. Holding multiple credit options and outstanding credit card dues is one of the surefire ways towards financial toughness and difficulties. Here is where opting for one of the best personal loans as per your preference and budget can rescue you from such a debt-ridden scenario.
The biggest benefits of a personal loan are that you may avail of this loan at an affordable interest rate based on your credit profile and income. In case you are not able to get the best personal loan interest rate as per your budget and preference, then you can visit online lending marketplaces to strike a comparison amongst personal loan lenders to avail the best interest rate as per your cash inflow and requirement.
With personal loans available at low-interest rates, you can consolidate all your debts in a single loan. A personal loan will endow you with a way in which you just require making one repayment in a month, thus organising your finances better. If your repayment capacity on a personal loan is in a disciplined manner and your credit score is 750 and above, then you may even opt for a top-up on the same personal loan that you availed to consolidate your debts. You can use these top-up loan proceeds to either meet your financial needs or your personal wants like home renovation, buying a consumer durable product, planning a vacation abroad, etc. Note that if your repayment capacity and credit score on the personal loan that you availed for debt consolidation is good, then you hold a high chance of availing of a top-up on the same loan at a lower interest rate.
Wedding expenditures
A wedding or marriage is one of the crucial events in an individual’s life. Most of you leave no stone unturned to ensure your wedding is a memorable and elaborate affair. However, planning out a grand marriage may be a daunting affair or task. Here’s where choosing a personal loan can be looked upon as one of the best choices. You can avail of the required funds instantly with zero hassle.
To ameliorate your credit score.
Having a good credit score is extremely important when it comes to borrowing funds. Credit scores may be determined by the credit bureaus depending on how individuals and institutions can manage the borrowed funds and repay the same back on time. If you are one of those borrowers who fail to repay past loans on time, then you may be looked upon as risky. Thus, consolidating your debts, repaying your loan by the due date, maintaining a good debt-to-income ratio, etc., are a few of the crucial ways to ameliorate your score.
Note that you must repay your loan instalments by the due date until the loan tenure ends, as missing, defaulting or delaying the payment may negatively impact your credit score. Thus, if you are looking to avail a big loan such as a home loan in the future, then a healthy credit score is very important.
Home upgradation
Upgrading your house with present-day fittings, modern equipment, and more space is one of the smart uses of personal loans. You might want to make this more functional, or you may be looking to enhance the resale value so that if you wish to sell the property in the future, then you may get a good deal out of it. One of the best ways is to avail yourself of a personal loan for home maintenance or home improvement.
For the travel arrangements
A personal loan may be availed for travel purposes too. This can cover all your expenditures linked with your vacation, like flight fare, travel, accommodation, etc. So, if you are looking to plan a trip, however, you lack the required funds for the same, your plan might not fly. With the help of a personal loan, you can arrange your travel very easily to avail the funds you require to organise your travel and various other arrangements for your dream holiday.
For education purpose
Availing of a personal loan for education purposes is one of the common uses of personal loans. Often, students look to study abroad or in a specific program, which might not qualify for education loans or might require more funding than available via education loans. Thus, parents may apply for a personal loan to fund the higher studies of their kids. Through personal loans, you can apply for special certificates, term vocational courses, etc. It even can be availed to take care of your kid’s tuition fee.
For business owners
A personal loan may also provide a lot of benefits to a business owner. Personal credit options are versatile in nature and hence do not put any restriction on fund usage. At times, your business might require multiple expenditures and instant cash-based expenditures. In such cases, a personal loan may be made available over the short term. A personal loan may also be utilised by self-employed individuals for personal or business needs.
Ending note
You can select a personal loan from any lender as per your choice to meet your different fund requirements. Once you fill out the application form and even upload the documents, your loan application may be approved instantly in the case of an instant personal loan or within 2-7 days in the case of a regular personal loan.