Personal loans: THESE are the 5 key reasons for which it is not unreasonable to borrow | Mint
Source: Live Mint
If you are planning to raise a personal loan, remember that there are certain reasons for which it is not unreasonable to take a loan. For instance, when there is an emergency at home or a wedding.
Additionally, there are some people who do not refrain from taking a loan for going on a vacation as well. Additionally, it is not uncommon to take out a loan for buying a luxury item.
So, if you too are wondering which are the key purposes for which it is not irrational to take out a loan — then we have prepared a short list for you.
5 key reasons for raising a personal loan
1. For organising a wedding: When you have to organise a wedding and fall short of funds, you can take a personal loan. This is not a very recommended practice, but when there is no other alternative, it is advisable to take a personal loan.
Let us suppose you need ₹10 lakh to organise a wedding and your savings have accumulated only ₹7 lakh. Then all you can do is to raise a personal loan amounting to ₹3 lakh.
2. To buy a luxury item: When you are keen to buy a luxury item, and you are short of funds, then it is not wrong to raise a personal loan. For instance, you want to buy an expensive phone which is important for your work – then it can be seen as an investment.
In that case, it is not wrong to raise a personal loan to be able to purchase that luxury item.
3. For higher education: Although one should rely on student loans for higher studies, it is recommended to meet the gap between what you need and what is on offer via personal loan.
Suppose you need ₹40 lakh for sending your child abroad and all you have managed to raise is ₹34 lakh. Instead of cancelling the plan to study your child to an overseas university, you can meet the deficit by raising a personal loan.
4. For vacation: Again, this is not a highly recommended thing to do — you can raise a personal loan to go on a vacation when you keenly want to go on a break. For instance, you have a group of friends from the school time and together, they have decided to go on an overseas destination.
Although the plan was made two months ago, you could not save enough money during this time.
So, it is not unreasonable to raise a personal loan in this particular case.
5. For urgent work: For everything else, which is too important to be ignored, you can raise a personal loan. For instance, you need money urgently to retire your old debt.
(Note: Raising a loan comes with its own risks. So, due caution is advised)
