Personal Loans: 3 smart reasons to consider borrowing for your next big expense | Mint

Whenever you fall short of money or stare at a sudden shortfall, all you typically think of is to raise a personal loan. There could be a slew of reasons to raise a personal loan.

You might want to buy an expensive gift for your partner, or there could be an urgent requirement of money, or there is an expenditure for which you can’t afford to save. These, and many more, are some of the key reasons for which it is not uncommon to raise a personal loan. On the contrary, it is recommended.

Here we present three key reasons for which you can, and perhaps should, raise a personal loan.

These are the 3 key reasons for raising a personal loan:

1. When you know that you can’t wait to save: Ideally, wealth advisors suggest investors to save money to buy what you want to buy. For instance, if you want a piece of rare painting, save enough to be able to buy it. Is there any rare collection of clothing that sets your heart racing? Well, save for some months to buy it.

There could, however, be a few occasions when you can’t afford to wait. For instance, there is an expensive watch that you want to buy for your partner on her birthday. What do you plan to do? Wait until her next birthday? Not a very sound advice for someone who is looking for a long and healthy relationship.

In such, and many of the personal reasons, you may want to raise what is appropriately labelled as ‘personal loan’.

2. Important for you: There are certain things that are too important for you to ignore but not everyone would perhaps understand your feelings. For example, you are a bike enthusiast and are planning to buy some imported accessories to be fitted into your motorcycle. It may not be easy for you to raise a loan specifically for this.

Even your friends may not agree to give you a loan for what they would call a ‘wasteful expense’. In such a scenario, it is advisable to rely on ‘personal loan’ offered by most banks.

3. When there is an urgency: An urgency could be of any kind. You might have to pay for your child’s school fee or spend money on the treatment of a loved one, or on a lighter note – pay for the bachelor’s party with some close friends before your wedding, or on a serious note – pay for the wedding itself.

For all these urgent, and some not-so-urgent expenses, you can consider raising a personal loan.

However, the list we made here is only indicative and certainly not exhaustive. There could be different reasons for different people. So, the discretion lies with you. After all, it is a very ‘personal’ decision.