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Why use personal loans over credit cards? Explore situations where personal loans are a better choice for managing expenses and achieving financial goals.
A personal loan is an unsecured loan that offers hassle-free loan processing, instant disbursal, free-to-use funds, and other features that fulfil people's monetary needs.
But now the question remains: why use personal loans over other funding options, and what makes them a smart choice for certain situations?
In this blog, we will walk you through common situations when applying for a personal loan makes sense.
Personal Loan For Occasions
Personal loans can be used for different types of occasions. The following are the two most common occasions for which personal loans can be applied for:
Personal Loan For Wedding
Whether it is the perfect wedding outfit, a stunning engagement ring, or a feast of delicious food, a personal loan can help you fulfil your wedding wish list.
By applying for a personal loan, you can secure the necessary funds to cover these essential expenses and ensure your special day is everything you have dreamed of.
Personal Loan For Anniversary
A personal loan can also help you gather the funds needed to celebrate a memorable marriage anniversary.
With this loan, you can book the best banquet hall in town, complete with stunning decorations.
It allows you to organise a beautiful party and invite guests to share in the joy of the occasion.
Personal Loan For Emergencies
We all face unexpected emergencies at some point in our lives. This type of loan allows us to raise instant capital and cover the expenses related to emergencies.
When people ask why use personal loans, two common reasons often come up. These are:
- Personal Loan for Medical Emergencies
When faced with medical emergencies and the need for a significant sum of money, applying for a personal loan is the only way to deal with such situations.
This personal loan allows you to arrange any sudden expense without compromising your assets.
- Personal Loan For Home Renovations
It often becomes difficult to afford renovation costs when it comes to remodelling the kitchen or addressing any electrical hazard.
You can use a personal loan in this situation also to overcome any safety issues and maintain the aesthetic appeal of your home.
Personal Loan For Different People Groups
Personal loans are also categorised among different groups of people. Here are some common groups who need this loan for different purposes:
Higher Education Loan For Students
To choose the right career path and earn a degree of their choice, students can avail a personal loan.
A personal loan can be useful for collecting funds for education fees or paying off hostel fees.
Moreover, the lower interest on student loans, ranging from 10% to 14% per annum, makes it a feasible option for students in need of financial assistance.
Personal Loan For Women
Since women have proved that they are no less than men in taking responsibility, they also need some funding to maintain their finances.
To support their financial independence, several lenders offer benefits on personal loans, specifically for women.
Working women can use this loan to fulfil their long-term commitments without relying on someone else.
Personal Loan For Salaried
While a steady income ensures regular earnings, it does not always provide the liquidity needed to cover all personal expenses.
Moreover, using life savings for large, one-time expenses can disrupt long-term financial stability.
A personal loan for salaried individuals is a practical financial solution that enables them to quickly access the necessary funds.
Personal Loan For Government Employee
Financial institutions offer special benefits for government employees when applying for personal loans.
These loans usually have a simple documentation process and fast loan approval, making them a convenient option for government workers needing quick financial help.
Personal Loan For NRIs
The Non-Residents Indians (NRIs) can also use a personal loan to obtain funding while residing in another country temporarily.
They can use this loan to make payments for residence or other purposes.
Personal Loan For Debt Consolidation
Personal loans allow individuals to pay off multiple existing debts by combining them into a single loan.
If you are struggling with multiple high-interest loans, you can apply for a debt consolidation loan based on your credit history.
Personal Loan For Used Car
Many people are choosing to purchase used cars with the help of personal loans. But why use personal loans instead of opting for a car loan?
The key reason is that personal loans are ideal for purchasing cars under ₹5 lakh, while used car loans are more suited for buying higher-priced vehicles.
Features of Personal Loans
A personal loan offers several benefits and features that make it a preferable choice over other financing options.
Here are some key features that highlight why use personal loans instead of considering alternative solutions:
- No Collateral Required: No collateral or security is required while applying for a personal loan.
- Flexible Repayment: Based on your needs, you can choose a particular repayment tenure for this loan. The typical loan repayment period for these loans is 12 to 60 months.
- Minimum Documentation: In comparison with other loans, personal loans require very basic documents related to identification, address proof, as well as income details.
- Instant Disbursal: The loan disbursement process is very instant in personal loans and can be completed within a few hours.
The Bottom Line
Besides being aware of why use personal loans, it is also important to check eligibility criteria and other factors before applying for it.
You must check your credit score before opting for a personal loan. Once you have done your due diligence, you are all set to apply for a personal loan.
Get instant loans online via Jar to fulfil your personal needs and avail numerous benefits like flexible EMIs and paperless loan applications.
Frequently Asked Questions
- What is fresher funding?
Fresher funding is a type of personal loan that is used by freshers or newly joined employees. Some financial institutions offer up to ₹1 lakh in fresher funding.
- What are the eligibility criteria and documents required for a personal loan?
The eligibility criteria for a personal loan is that individuals must be employed and reside in India with an age range of 21 to 80 years.
The foremost important documents are KYC documents, PAN cards, employee IDs, salary slips, and income statements.
- Why use personal loans?
Borrowers prefer personal loans since they provide numerous benefits like instant disbursal, no requirement of collateral, minimal documentation, and flexible repayment options.
