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Do you need a personal loan?
Jul 28, 2022
Whether covering medical emergencies, home renovations, vacations, dream weddings, or debt consolidation, financial requirements can arise unexpectedly. This is where a personal loan becomes a feasible solution as it can be used for any financial purpose. They are unsecured loans, implying that there is no collateral backing the loan. Regardless of your reason, personal loans are an excellent choice for consumers because they are often less expensive than credit cards and provide funding faster than home equity loans or HELOCs.
Furthermore, because there is often no collateral linked to a personal loan, it is a less risky type of financing than secured loans such as home equity products. If you default, your home, vehicle, or savings account is not instantly at risk.
Understanding how a personal loan works
Most lenders will calculate your interest rate depending on your creditworthiness and other aspects. Once approved for a personal loan, the funds will be deposited in a lump sum into your bank account. Depending on the lender, the transfer could take just a few weeks. You must start making monthly payments once the loan is disbursed.
Let us look at a few circumstances where a personal loan would be ideal.
Consolidation of existing debts
When you are simultaneously paying and managing the EMIs of several small loans, the total amount of all the EMIs you would be paying per month is likely to be high. In addition to this, managing multiple EMIs and keeping track of the remaining principal amounts is a difficult task. In such a case, obtaining a personal loan is an excellent way to consolidate your debt and pay a single interest rate with a fixed monthly EMI. This will simplify your monthly finances, and give your budget a sense of stability and predictability.
Home remodelling
You can use a personal loan to upgrade your home or fix necessary repairs, such as plumbing repairs or electrical wiring upgrades. Those who do not wish to take a home equity line of credit (HELOC) or a home equity loan may benefit from a personal loan. A personal loan is a good alternative as you can avoid the risk of losing your precious home, in case you fall behind in making payments.
Boost your credit score
An individual's credit score is calculated based on promptness in loan and credit cards repayment. When you apply for a personal loan, you repay it in installments. Timely payments will contribute to your credit history and boost your credit score.
Higher education
Higher education may be costly, especially at a foreign university. However, it is also an opportunity that can be a tremendous learning experience and greatly enhance one's career options. If you are uncertain about covering higher education expenses, a personal loan can be your solution. A personal loan is always a better option because there are no requirements for obtaining one.
Meet medical emergencies
Medical emergencies necessitate immediate financial assistance. A life-saving surgery may require you to make the payment within 24 hours. When there is an emergency, applying for a personal loan and receiving disbursement can be completed within hours. Other benefits, such as pre-approved offers, instant approval, and a lower EMI, make this loan suitable for dealing with such emergencies.
Vehicle financing
Auto loans are available if you want to buy or lease a car, but so are personal loans. Auto loans typically have lower interest rates than personal loans, but they have secured loans that use the collateral of your vehicle. If you are concerned about missing payments and having your car repossessed, a personal loan may be a better option for you.
A personal loan allows you to divide expenses into smaller, more affordable payments. By being mindful of your financial requirements, you will be able to meet your necessities with the help of a personal loan. At BanqMart, you can find the best loans in UAE that fits your financial needs. With our competitive loans, you can take control of your financial affairs with no hassles.
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