9 ways to use your personal loan

Are you looking for a personal loan online? Personal loans are more versatile in their uses than you think. A personal loan makes big purchase decisions like buying a home easier. The best part? You can use a personal loan for home improvement, debt consolidation, and emergencies without dipping into your savings.

Here’s how you can make the most of your personal loan:

What does a personal loan mean?

A personal loan is a retail loan that an individual borrows from a bank or NBFC. Unlike others, a personal loan online does not require collateral. Lenders charge an interest rate on the principal, which you pay in EMIs.

What is the use of personal loans?

A personal loan online does not specify a purpose like home or car loans. You can borrow to avert financial crises or emergencies. However, the recent shift in loan management has diversified the uses of personal loans.

For instance, you can use a personal loan for education. It assists you financially without adding a burden on your savings.

How can you use your personal loan?

Personal loans are versatile – you can use them to finance almost anything. Debt consolidation is one of the most common uses of a personal loan. You can also make purchase decisions such as home repair and renovation or finance a wedding with a personal loan.

Since personal loans are unsecured, you can use them to tide over a financial crisis. For instance, you can use personal loans instead of emptying your emergency funds.

Here are nine ways to use your personal loan:

Debt Consolidation

Is a loan a good idea if you’re already in debt? While it varies with people, getting a personal loan online can help you with outstanding debt.

Debt consolidation is when you use personal loans to repay your other debts. For instance, when you have multiple loan repayments. You can streamline your EMIs with low personal loan interest rates.

Medical bills

One of the more common uses of a personal loan is for medical expenses. Healthcare is a huge financial burden in India. It is difficult to find adequate financing during medical emergencies. A personal loan online can help you alleviate some of that burden.

Personal loan for wedding

Weddings are extravagant and costly affairs in India. People go all out during the wedding season; you may incur a hefty expense that exceeds your overall budget. A personal loan comes in handy when you foot an unexpected wedding expense.

Relocation and renovation

You can borrow a personal loan online for home improvement. Relocation and renovation are often extra expenses. In this case, it makes more sense to use a personal loan instead of a home loan. Moreover, you can take care of any repairs to your property with low personal loan interest rates.

Unforeseen emergencies

Getting a personal loan online is handy when you’re in a pinch. It includes any unforeseen financial emergencies like immediate hospitalization or a financial loss. A personal loan helps you stabilize your finances by giving you access to cash flow.

Large purchase decisions

A personal loan can affect your purchase decisions personally and professionally. Both self-employed and business persons can use personal loans professionally.

You can also improve your credit score by borrowing a personal loan online. Debt consolidation, for instance, can help you improve your overall credit score.

Travel and vacation

You can also use a personal loan for travel and vacation. It is also convenient during emergency travel situations. It can cover the following costs:

• flight or train fares
• travel insurance
• hotel accommodation
• tours

Personal loan for education

A personal loan for education is one of its more widespread uses. Many parents help their students by taking personal loans themselves. You can use it to sponsor your child’s education abroad.

It is beneficial when you get low personal loan interest rates. You can also use it to plan your child’s long-term education, like studying abroad.

Bonus – Personal loan for tax paying

A personal loan does not have tax-paying benefits as it is not a part of your income. Nor are there any benefits on personal loan repayment. However, you can claim deductions for how you use the personal loan. For example, a personal loan used to buy or renovate property may be eligible for a deduction.

A personal loan online can save you from a financial crisis. It can help you deal with emergencies and existing debts. However, you must understand how to use a personal loan effectively. A personal loan is only a financial instrument, and you must understand its pros and cons to reap its benefits.