A financial emergency is not the only reason behind availing a personal loan. Not all debts are bad. Sometimes, you avail personal funds for good reasons. If there is no debt on your head, then chances are that your credit report is nil. Here we discuss top 10 reasons to apply for a personal loan:
1. To Renovate your Home
You can access quick funds to repair your house or give a complete makeover. Actually, spending money on home improvement is an investment, not a regular expenditure. It increases the property value and you can earn good long-term benefits.
Home improvement loans are easily available online. Many online lenders in the UK offer house renovation funds at an affordable interest rate. An improved home would give you positive vibes as well as good revenue.
2. To improve your Credit Score
Have you applied for a credit card and it got rejected due to your zero credit score? You can start your credit inning by availing a personal loan. If your score is poor, then repayment of the loan EMIs on time will surely improve your credit score.
Wondering how can you avail a personal loan with a zero or poor credit score? Well, it is easy. Most of the online lending companies in the UK offer guaranteed personal financing options for bad credit borrowers.
3. Create a Contingency Fund
Life is full of unseen surprises and you should be ready to tackle financial crises that come to you. Saving lump sum money for an emergency fund is tough due to low earnings and high expenses.
You should avail funds equal to 3 months of your expenses. Repayment of a personal loan is easy and you can pay off in EMIs.
4. To Settle Late Payments
From credit cards to various utility bills, timely payment is the key. One missed payment or a late payment can affect your credit score negatively. Moreover, late or missed payments may lead to higher penalties. You can settle all late payments by taking a small personal loan for 6 months.
5. To Pay off other Debts
Paying too many credit card bills and other debts is quite confusing and tiresome. One can take a high-value personal loan and pay off all debts in a single go. It is easy to manage a single debt than multiple debts. Debt consolidation loans are highly popular among the borrowers in the UK. A debt consolidation loan allows you to consolidate your current debts and pay off the availed amount in a single EMI per month.
6. Manage Sudden Expenses
There are unexpected situations like serious illness, injuries, or car accidents that disturb your monthly budget and you need quick money to manage these unavoidable expenses. Various online lenders in the UK offer same day personal loans without any guarantor or collateral.
Investing money in regular plans by availing a personal loan is not a smart idea. However, there are exceptions when you have chances to earn double returns on the investment i.e. A property is up for sale at a half cost or gold prices have gone down. You can take a quick personal loan and invest the availed money in such options. But, you should ensure the total earned interest or revenue should be quite higher than the paid total interest on the availed loan.
8. Manage Wedding Expenses
A wedding is a once in a lifetime experience and you want your D-day to be extremely special. You need a lot of money for arrangements, functions, wedding dresses, gifts, jewellery and more. Wedding loans are types of personal loans where you avail quick funds and repay in convenient EMIs.
9. For Holidaying
Do you want to go on a world tour? Are you looking for a personal loan to arrange funds for your dream honeymoon? Whether you are going to a local destination or on a world tour, you can always avail personal loans for travel for a stress-free holiday experience. Such loans are not expensive and can be repaid in a flexible tenure.
10. For Relocating to a Distant Place
People relocate to different places due to various reasons like a permanent job transfer, for searching employment opportunities, starting a new business, and more. However, relocation to a distant place is quite expensive. You need to transfer your car, furniture, and other household items. A personal loan is a right solution to arrange quick funds.
Nowadays, availing a personal loan is quite easy, but you should think twice before taking the final decision. You shouldn’t make a habit of applying for a personal loan after every second month. Your over-borrowing habit can make you a bankrupt.