InvestorQ : When does one need a personal loan?
riya Ranade made post

When does one need a personal loan?

priya Shah answered.
3 years ago
Personal loans are unsecured loans that often carry an interest rate lower than credit cards. As it is an unsecured loan, you don’t have to submit any asset or collateral to the bank or non-banking financial company.
What’s important about personal loans is that they are given to applicants without asking any questions. And as the name suggests, you can utilise a personal loan in whichever way you deem fit.
Here are few of the most common scenarios where individuals have sought a personal loan from a bank or an NBFC:
- Medical emergencies
Medical emergencies occur at any time and you must be prepared for this eventuality. There could be times when you don’t have adequate savings to meet your medical expenditure. You can also land in this situation if you don’t have a good medical insurance. At such times, because it doesn’t require any collateral, personal loans are a good source of capital to meet your urgent medical expenditure.
- Higher education
While there are a lot of banks and NBFCs that offer educational loans, the downside of these loans is the high-interest rate it attracts. Banks also generally fund the education of the students of a few selected and prestigious institutions. Also, there are times when education loans just aren’t enough to cover tuition, relocation costs, living costs, etc. In such situations, personal loans prove to be extremely helpful. The personal loan amount can be used to cover living costs, relocation costs, etc. and the best part is that personal loan come with relatively lower interest rates.
- Weddings
Indians’ love for weddings and gold jewellery is well known and invariably, Indian weddings involves expenditures of whopping numbers. However, not everyone may have enough money saved to throw a big, fat Indian wedding. In such instances, personal loan is a good way to fund wedding, provided it comes at a good interest rate.