Expenses are part of life. But some of the expenses cannot be managed within your salary or business income. These instances call for outside help, a personal loan, to be precise.
A personal loan is the type of loan that does not require you to put anything in collateral.
The reasons for applying for a personal loan can be very different and wide-ranging for burrowers. But when you are applying for a personal loan, you have to specify the reason.
While you can apply for a personal loan to manage any of your expenses, you cannot do so for reasons such as gambling.
Here are some reasons for which you can get a personal loan.
- Quick emergency cash flows
If you require quick cash, you can apply for a personal loan. Situations when you might need emergency cash include the following:
- Paying for an urgent surgery of your loved one
- Submitting the tuition fee of your kid
- Paying arrears in utility bills
- Funeral expenses of your loved one
- Hospital bills for emergency treatment due to an accident
Some countries have very streamlined processes for applying for loans. Lending companies in countries like NZ have dedicated websites, an easy application process, and excellent customer service to assist their customers.
Lenders also offer a complete online procedure that does not require you to come into the office and spend hours fulfilling the paperwork before you get your application submitted.
If you are looking for lenders in NZ, search “quick emergency cash loans NZ” online. Once you press enter, you can get various options. Visit the websites of a few lenders to see application procedures and the terms and conditions. You can follow a similar mechanism if you are in a different country like the USA, the UK, Canada, etc.
- Renovation of your house
Personal loans are often applied when you are renovating your house. A home makeover is often an extensive and costly exercise that you cannot manage without applying for a loan.
It become necessary in places such as Canada, New Zealand, and the USA, where renovation costs are very high. For instance, in NZ, you can expect your home renovation cost to range from $10,000 to $100,000, depending on the extent of your project. Some people have also reported spending over$200,000 on home renovation.
In the USA, the home renovation cost is from $100,000 to $200,000, though actual costs are contingent on the square footage. Therefore, a personal loan is a more autonomous option for home renovation. It does not leave any room for borrowing from your friends and family or cutting on your monthly expense.
A personal loan is also a much better option than a payday loan that requires you to pay back the loan when you get your next paycheck. These loans have high-interest rates too. So, when compared to personal loans, payday loans don’t seem a prudent decision for managing the costs of a home renovation.
- Debt consolidation
One of the reasons people apply for personal loans is debt consolidation. A personal loan is suitable for debt consolidation because it has less interest rate than a credit card. So repaying is much easier.
You may even get a personal loan at as low as a 4% interest rate— much below the double-digit figures you have to pay in a credit card loan. So, apply for a personal loan and clear all your outstanding credit card loans. Later, you can make a single payment to your loan lender.
- Moving to a new place
Moving is not limited to the hassle of packing your stuff and then rearranging it at a new location. Moving is costly too. You have to spend on various expenses, including:
- Hiring a trusted moving company for packing and transporting your stuff
- Manage the costs of installing utilities at the new place
- Paying advance rent payments and security deposits
- Paying bills in your last house
- Buying supplies
- Spending on any renovations required in your new house
- Applying for new schools for your kids—books, uniform, school van expense
- Cash needed to furnish your new house
The list of the expenditures involved in moving goes on and on. But you cannot manage this much expense with your saving or salary. A personal loan can pay for all the expenses mentioned above, making your moving process hassle-free.
- Buy a new vehicle
Buying a new vehicle is a dream come true for many of you. But purchasing a new car is not a child’s play. It needs you to arrange for a lot of money. Either you wait for years and save pennies from your salary, reduce spending on necessities or straightforwardly apply for a personal loan. The latter option is more convenient and quicker, and you can have a new vehicle in no time.
You might argue that the option of Auto loans is also available, so why go for personal loans? The biggest benefit of personal loans is their low-interest rate on the principal amount. When the interest rate is too high, you ensnare yourself in debt repayments, spoiling your joy of getting your own vehicle.
Moreover, auto loans are also secured, which means you will have to use your vehicle as collateral. But, in personal loans, even if you fail to repay your loan payments, you don’t fear your car being confiscated.
- Wedding expenses
Getting a loan to pay for exuberant and extravagant weddings is never recommended. But sometimes, fulfilling the basic expenses of your or your loved one’s wedding becomes a trial. In that case, you have no other way to apply for a loan.
Few options for funding the wedding expenses include credit cards and personal loans. Because of the higher interest rate of credit card loans, a personal loan is a good financing option.
Personal loans are a suitable option for managing many of your expenses. You can also have money in less time. However, you must rethink applying for a personal loan if you have no way to pay it back and have no immediate use for it.