Money is the lifeblood of our existence, the enabler of our dreams, and the cushion that softens the blows of unexpected expenses. In India, where needs and aspirations are as diverse as the landscape, personal loans have emerged as a versatile financial lifeline.
However what exactly are personal loans, and why are they becoming increasingly popular? In this article, we will embark on a journey to explore the top 10 reasons why individuals across India choose personal loans to fulfil their financial goals.
Reasons for Taking Personal Loan
By understanding personal loan purposes and using them judiciously, individuals can navigate their financial journeys with confidence and control. Some of the most common reasons for taking a personal loan and how these loans can serve as a practical solution for financial needs are listed below.
Home Renovation
Personal loans serve as a lifeline for Indian homeowners looking to transform their living spaces. Whether it's a fresh coat of paint, a complete renovation, or upgrading to a modern kitchen, home improvement projects can be costly.
Personal loans designed for home renovation offer a unique feature – the "step-up loan" option. In the initial months, you only pay interest, easing the financial burden. These loans are typically unsecured, so you don't need to risk your property as collateral.
Buying an Expensive Phone
Owning the latest smartphone is a necessity in today's tech-savvy world, but flagship phones come with high price tags. Personal loans provide a cost-effective alternative to credit cards, often laden with high interest rates.
These loans typically offer lower interest rates, making them a more affordable option. You can choose a repayment period that suits your budget, ensuring you can stay up-to-date with technology without incurring high credit card interest. Personal loans make owning the latest gadgets accessible and affordable.
Holiday/Vacation
The allure of an exotic vacation can be irresistible, but what happens when the opportunity arises, and your finances aren't quite ready? Personal loans offer a solution.
Personal loans provide the flexibility to pay off your EMIs comfortably, allowing you to enjoy your vacation without immediate financial strain. What's more, you can even choose to foreclose the loan after 6 months when your fixed deposit matures, without any prepayment penalty.
Wedding
Weddings are joyous celebrations, but they come with substantial expenses. From the venue and catering to attire and decorations, the costs can quickly add up. This is where personal loans provide a practical solution for those looking to celebrate their special day in style.
With a personal loan, you can effortlessly cover wedding expenses over the loan's tenure, sparing you from the potential awkwardness of borrowing from friends or family. This financial tool ensures that your wedding day remains special, as you can focus on creating beautiful memories without being bogged down by financial concerns.
Purchase of Bikes
Owning a sleek and reliable bike is a dream for many enthusiasts, particularly the younger generation. Bikes represent a sense of freedom and mobility, but they can come with a significant price tag.
Personal loans offer a practical financial solution for those looking to purchase a bike. Whether it's a conventional petrol-powered bike or an eco-friendly electric one, personal loans make it feasible.
What's great about personal loans for bike purchases is that you can pay off the loan over the loan tenure, spreading the cost over time. This makes it more affordable and allows you to enjoy the thrill of riding without straining your savings.
Purchase of Laptop
In today's digital age, a laptop is no longer a luxury; it's a necessity. With remote work, online education, and freelance opportunities on the rise, a laptop is a need. This is yet another significant expense for which people choose personal loans.
Medical Emergency
Emergencies don't come with warnings. When you face a medical crisis and need immediate funds, an online personal loan can come to the rescue. These loans are credited within 24 hours, allowing you to manage a medical emergency with ease.
You even have the flexibility of paying only the principal component for the first 3 months, as the normal EMIs start after that period.
Rental Deposit
Relocating to a new city or finding a rented place can be a challenging proposition. Homeowners often demand 6–12 months' rent as a security deposit, which can be a lot to handle upfront.
Rental deposit loans can come to your rescue. These loans are available for 11, 22, or 33 months and are paid directly to the owner. You need to pay only the interest over the loan's tenure, after which the amount is refunded to the lender by the homeowner.
Debt Consolidation
Debt consolidation loans are a valuable lifeline if you are bogged down by multiple loans and high interest rates, pushing you into a debt trap. A personal loan helps you switch from multiple expensive credit card debts to a more affordable personal loan with lower interest rates and credit score improvement.
Personal Loan for Education Purposes
Investing in education is important and cannot be put off. Getting your child to a coaching institute or higher education can cost a lot of money. If funding is an issue, you can choose a personal loan for education purpose to manage your finances. It can be repaid comfortably over the tenure of the loan while your child can benefit from a good education.
Conclusion
In the diverse landscape of personal finance, personal loans have emerged as a versatile and practical financial tool. They cater to a wide array of needs and desires, offering individuals the opportunity to realise their dreams and tackle life's financial challenges with confidence.
Therefore, whether you're looking to enhance your life, address immediate financial needs, or invest in your future, personal loans can make it happen. Ready to make your financial dreams a reality? TATA Capital is here to support your journey. Whether it's home renovation, purchasing a bike, or any other financial need, our range of personal loans is designed to make your life easier. Explore our flexible and hassle-free loan options today.
03 November 2023
6 mins read
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