In today’s world, you wouldn’t come across a single person who doesn’t know what is a personal loan. Still, here’s quick recap, a personal loan is an unsecured loan. It is given with any form of collateral.

Personal loans are ideal when it comes to emergencies because one can access quick cash through them. Instead of borrowing money from friends, family, or relatives, most people have turned towards personal loans instead.

According to the Reserve Bank of India (RBI), personal loans account for 28% of the total bank credit. If you’re wondering what the hype surrounding personal loans is, we have a list here for you. Here are the top 5 reasons why you should take a personal loan.

1. Debt consolidation

There can come a time when you’ll have to pay EMIs of several small loans together. In this case, the total EMI to be paid per month is generally very high. Moreover, keeping track of every single EMI, the dates, and the balances can be a tough job.

So for these situations, a personal loan is the best choice for you. You can consolidate the debt and pay a single rate of interest on the same with a fixed amount of EMI each month.

This will narrow down the entire payment process and streamline it. You will also feel mentally relaxed and stable while calculating your budget.

2. Medical emergencies

We never know when one of us may fall ill or be a victim of a major accident. No matter how much insurance we have, it’s always better to have some funds stored away for medical emergencies.

If you or your loved one is in dire need of money for a medical emergency, taking a personal loan is ideal. You will be able to secure the required amount of money in a short time and save your or your loved one’s life.

Many companies like Paysense offer instant personal loans in a paperless, digital process. This helps us a lot when time is of the essence during surgery. These funds are usually transferred to your account within a few hours or 1-2 days.

3. Business expansion

If you’re planning to open your own business, you’ll need to get your hands on a large sum of money. Organizations like Paysense offer business loans for business startups or expansions. This is especially beneficial for small or medium-scale entrepreneurs.

The best part is that you shall not be bound by any restrictions as to how to spend the money! So you’ll be able to expand your business without any collateral or any worries.

4. Weddings

Weddings are extremely expensive, especially in countries like India. There’s no greater satisfaction than to have your very own “big fat wedding”. But a fancy wedding needs ample amounts of money. Earlier, people used to borrow money from loan sharks or moneylenders, but those options can be very dangerous.

A personal loan is perfect for funding a wedding. There can also be several unforeseen expenses at a wedding, so it is always best to have as much money as possible.

Many organizations offer up to Rs. 5 lakhs as personal loans without any collateral or securities. This will help you to spend on your wedding without any kind of mental burden.

5. Any big-ticket purchase

If you’ve moved into a new house, there are various things you’ll have to buy, such as refrigerators, ACs, or even vehicles. These expenses aren’t exactly minimal, which is why a personal loan can greatly help you out here.

You can go for a personal loan of the required amount and repay it in small EMIs. Almost everyone is turning to personal loans nowadays except for people who are willing to buy car or home – they instead go for car loans or home loans.

Personal loans also offer low rates of interest and the loan tenure is also much shorter.

Over to you…

Due to the increasing financial awareness among the common people, personal loans have become the most common form of loans. There is minimal or no paperwork required, so the entire process of obtaining the loan is much simpler than in earlier times.

Due to the absence of any collateral or security deposits, personal loans are a huge relief for people who need loans quickly. If you too need a large sum of money in a short time, you can apply for a personal loan as soon as possible, no matter what the occasion is.