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Personal Loan for an Emergency

Money is in shortage but emergencies are not. Murphy’s law waits for no one. “If anything can go wrong it will”. It’s in such emergencies that you need a personal loan. A personal loan is unique as the bank does not ask you the reason for availing the loan. You can avail this loan for a medical emergency, to buy a consumer durable or for a marriage. You can also avail a personal loan to pay back a borrowed loan or take a foreign holiday. You also don’t need to give collateral (security) when you avail this loan. This means personal loan for an emergency is a must.

Need for a personal loan

You need to decide if you must avail a personal loan or not. If you are short of money for a medical emergency or your marriage availing a personal loan is a must. If you avail a personal loan to go on a foreign holiday then you need to remember that repaying this loan may not be easy as it charges an interest as high as 14-17%. If you are unable to repay the personal loan and default on it then your Cibil score is affected. You will not be able to avail any other loans especially a home loan when you need it the most.

Use the personal loan as a stepping stone

A home loan is very important and you can use a personal loan to help you secure that dream house. When you purchase a home you need to make a down payment (say 10-20%) of the cost of the home. You can then avail a home loan for the remaining amount. You can avail a personal loan to make the down payment for a home loan. It serves as a stepping stone to your dream home.

Who takes a personal loan?

These loans are availed if you live in a tier 1 or 2 city or a metro. If you live in a city you generally avail a personal loan of INR 1-2 Lakhs to meet any emergencies. In a metro you need to avail a personal loan of INR 3-4 Lakhs as living expenses are high. A personal loan is generally availed by those who are young and just starting their careers. If you are 25-30 years of age you would avail a personal loan.

These loans are then used to buy goods of personal aspiration such as the latest mobile phone or a high end laptop even though interest rates on a personal loan are high.You need to be responsible when availing a personal loan. The bank places the responsibility of repaying the loan without any hitches squarely on your shoulders. Avail a personal loan only in an emergency.

Banks have tightened their belts

Banks sanction your personal loan only if you have a steady job. Banks do not want to suffer losses as these loans are given without any collateral.If you avail a personal loan from the bank where you have an account it is easier to get a personal loan. You can also get the benefit of a lower interest rate.

Remember : Always avail a personal loan responsibly. Personal loan for an emergency is a must.

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