Beyond emergencies: 5 alternative uses of a personal loan
Pune, 12th April 2024: Many people who experience unexpected expenses turn to personal loans for help. Even though life is unpredictable, you can always count on a personal loan to pay off sudden bills in case of an emergency. However, is this all a personal loan is designed for? Certainly not! In order to effectively manage your finances, you can use the proceeds of your personal loan to meet a variety of obligations.
1. Holidays/Vacation
Personal loans can provide you with the funds to arrange for that long overdue trip. Travelling abroad typically comes with a heavy financial burden, especially when foreign exchange rates come into the picture. A personal loan can always come handy, in addition to paying for flight tickets, hotel accommodations, shopping bills, and many other expenses.
2. Home improvement/Home renovation
Since home improvement plans can increase the value of your house, they will never be a waste of money. Personal loans can always be used to cover these expenses if you do not want to dip into your savings. You can use the loan amount to upgrade your kitchen, redesign your kid’s room, or even add a room to your house.
These extensions or renovations would not just make your home more comfortable but also prove to be lucrative in the future if you choose to sell the house.
3. Top-up for home loans or student loans
A financial emergency can happen any time, and handling the additional expense when you already have a liability like a home loan or education loan can be challenging. In such cases, you can always use a personal loan as a top-up over your existing loan to take care of the expenses at hand.
- Relocation/Rental deposits
Relocating to a new place can be stressful. It is quite likely that you will be required to pay a security deposit of anywhere between six and twelve months as a security deposit if you are moving on rent to a metropolis. In order to manage your finances, you can now apply for a personal loan, use the loan amount for your rental deposit, and repay your loan in affordable EMIs.
- Building a good credit score
In order to determine an individual’s credit score, credit bureaus evaluate their credit history. Some ways in which you can improve your credit score include, repaying loans on time, consolidating all your debt, ensuring a low debt-to-income ratio, etc.
In order to build your CIBIL score, you can apply for a personal loan and pay the loan’s monthly instalments on time. In the future, you may be able to get high loan amounts with favourable terms with a good credit record.
IDFC FIRST Bank offers Personal loans starting from ₹5000 to up to ₹1 Crore. IDFC FIRST Bank’s FIRSTmoney Smart Personal Loan comes with a credit line that allows you to withdraw the principal amount as soon as you begin repaying the EMIs, thus enabling you to avoid top-ups and meet all of your needs at once. Additionally, there are no foreclosure charges, so you can reduce your interest burden whenever you want.
With repayment terms ranging from 2 months to 84 months, you can pay off your loan conveniently. The best thing about applying for a smart personal loan with a reputed bank like IDFC FIRST Bank is that you do not have to deal with an arduous application process. You can get a loan approval in less than one minute and have it disbursed within 2 hours with the completely digital application process!
