A Personal Loan is regarded as a solution to meet your immediate financial needs. It is versatile and can work as a gateway for fulfilling your dreams, such as funding your dream wedding, paying for an overseas holiday, renovating your home, etc. Today, more people are applying for this Loan to meet their more significant expenses. Let us learn how Personal Loans work and what their uses are.
Overview of a Personal Loan
A Personal Loan is an unsecured credit. It does not need any collateral. It is also offered with minimal documentation. Several banks in India offer this Loan based on criteria like income level, repayment capacity, and employment history. Before applying for this Loan, you can utilise a Personal Loan eligibility calculator to check your eligibility and determine the maximum amount you qualify for.
Generally, this Loan is offered at a fixed interest rate, and you can select the Loan tenure based on your repayment capacity.
How does a Personal Loan work?
The workings of Personal Loans are simple. After you apply for this Loan and it is approved, your bank disburses the Loan amount directly into your account. You can repay the Loan over the predetermined tenure using equated monthly instalments. This EMI amount includes the principal and interest components.
What are the uses of Personal Loans?
Today, you can easily opt for a Personal Loan apply online. You can use this Loan for various purposes:
- Renovate homes
You can use a Personal Loan to cover the expenses of renovating your home. You could utilise the money to remodel your kitchen, change furnishings or fittings, etc.
- Consolidate existing debts
Apply for a Personal Loan to consolidate your existing debts.
- Relocation
If you are moving to a new home, it can be stressful and expensive. In such cases, you can take care of any urgent expenses that could crop up due to the move using a Personal Loan.
- Covers medical emergencies
When you face a medical emergency, it is usually a situation that needs immediate finances. Even if you have a Medical Insurance Policy, it may not cover all the expenses. In such cases, you can opt for a Personal Loan.
- Pay for your child’s education
Education is becoming more expensive. However, you may not want this to get in the way of your child’s dreams. Instead, apply for a Personal Loan to provide your kid with the support they require through college and school.
Conclusion
Now that you know how a Personal Loan works and the situations when this Loan can be a saviour, you can conveniently opt for it when the need arises.