No matter how much a person saves, there are certain circumstances where everyone is obliged to borrow. While every type of loan has a purpose, personal loan uses have always been cited to be multiple in nature. However, did you know there are some circumstances in which a personal loan might be a smart move?

In this article, we tell you when personal loans are a good idea and the common personal loan uses.

1. EMERGENCY SITUATIONS

Personal loans are the best way to arrange funds in the shortest time, and therefore one of the ideal personal loan uses is during emergency situations. One of the most common emergencies stated is medical expenses where you immediately need funds and substantial amount too. In fact, for any planned surgery, although it is easier to arrange funds by using your savings, personal loans can be a good resource to fall back on.

2. CONSOLIDATE CREDIT CARD DEBTS

One of the best personal loan uses is to consolidate credit card debts. If you have more than one credit cards that are maxed out, it is recommended to consolidate all credit card debts into a personal loan. Moreover, this also eases your repayment method of paying for just one type of debt instead of focusing on multiple credit card payments.

3. WEDDING EXPENSES

Another common situation which is ideal for personal loan uses is for covering wedding expenses. One�s marriage is the most special and important day. Since there are various types of expenses associated with weddings, including shopping, decoration, and so on, it is ideal to take a personal loan instead of using a credit card.

4. HOLIDAYS

While everyone says it is better to save and spends, there might be situations where the savings cannot meet the expenses and will not be sufficient. In such situations, one can opt for a personal loan to cover the expenses and enjoy the holidays without any worries.

5. PAYING FOR MARGIN MONEY OF THE HOUSE

For home loans, most of the financial institutions do not lend 80 per cent of the cost of the property wherein the home buyer is supposed to pay the remaining amount. The remaining amount to be paid for the house is called the margin money. Considered to be one of the best personal loan uses, a personal loan can fund for the margin money and other expenses such as stamp duty and registration charges.

6. REPAIR AND RENOVATION OF THE HOUSE

In ideal scenarios, a personal loan can be used for repair and renovation of the house. Since the turnaround time for personal loans is the shortest, it is ideal for urgent repairs and renovations.

Personal loans are a very useful financial tool in certain circumstances. However, it is essential to consult a trustworthy financial institution and weigh your personal loan uses.

DISCLAIMER

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.