Personal loan: 6 key reasons for which you could consider taking a loan | Mint

If you are a new investor and looking for immediate funds, then you can explore the idea of raising a personal loan. It is one of the most feasible ways to raise an unsecured loan in order to solve your financing needs.

Although the rate of interest of personal loan is typically higher than other loans, the ease with which it can be raised that too for no security in return – it is worth opting for.

Key reasons for which one can raise personal loan:

I. For a wedding: When there is a wedding at home and one falls short of funds, one can rely on a personal loan. One, obviously, can not postpone the wedding. The shortfall in funds can – therefore – be met via a personal loan.

II. Buying jewellery or a luxury item: If you want to buy a luxury item or a jewellery, you can consider raising a personal loan. For instance, if you want to give an expensive gift to your partner or friend on their anniversary, you would not want to wait for a few months to save the money.

Therefore, you could consider raising a personal loan to be able to buy that gift.

III. Renovation of house: Another purpose of raising a personal loan could be to carry out renovation of house. For instance, you need ₹10 lakh for the renovation and you only have ₹6 lakh, it can be a rational move to raise the remaining ₹4 lakh to complete the renovation of the house.

IV. Emergency expenditure: An emergency could be of any nature. There could be a medical emergency, or you need money to help a friend who is in desperate need of money, or there could be something else – you could consider raising a personal loan.

V. Vacation: Although it is not a very healthy practice to opt for, one could even raise a personal loan to avoid cancelling an important or sought-after holiday that you were yearning for.

VI. Education of a child: When you have a dependent child who has tuition to pay, but s/he is too young to raise an education loan – what you can do alternatively is to raise a personal loan to meet this urgent need.    

(Remember that raising a loan comes with its own set of risks. So, due caution is advised)