Personal loans are a highly versatile financial leveraging tool that can be utilised for many different purposes. Unlike housing or car loans, personal loans do not specify the need for you to utilise the received capital for a specific purpose. Instead, it can be used for any reason that benefits you, so long as it has been agreed on with the moneylender of choice.
Typical Usages for Personal Loans
Since personal loans can be utilized for an assortment of scenarios, it is useful to discover what their common usages are. In this article, we will be covering 3 common uses of personal loans. Be sure to read in detail of when they are applicable before you apply for the best personal loan in Singapore.
Consolidating Credit Cards
If you are a substantial user of credit, and have several cards saturated to limit, then a personal loan can assist to combine the debt. Each credit card would have a different Annual Percentage Rate (APR) affixed to it. Therefore, if you are unable to repay the total incured under a card, you would start acquiring interest owed to the financial institution.
Depending on the APR, a credit card’s rate of interest might be higher than that of a personal loan offered.In this scenario, you ought to strongly think about combining your credit card financial debts into a single personal loan. You will finish up paying less if schemed correctly.
Medical Expenses
Health problems and their corresponding hospital bills can be an extremely tricky concern to tackle. Certainly, specific treatments are time capped and cannot be postponed. Thus, if you don’t have the economic means to meet the cost of therapy, a personal loan would make sense.
However, you ought to take note of payment arragenments that the hospital may have in addition to your credit card’s interest & settlement plan. If a personal loan gives you a more beneficial settlement alternative, then you could seek it.
Shelling out for a Wedding
It is not always possible for couples to cut back on their wedding celebration’s expenditure as a result of a wide array of reasons. The challenge here is that in a solitary day, you would be charging your credit card a big expenditure.
If you do not have huge savings and are incapable to repay the financial obligation within a month, a personal loan with lower rates of interest would be a better alternative.
While not exhaustive, this list of reasons do give you a fair idea of the conditions under which applying for a personal loan makes sense. It is also worth mentioning that personal loans often do not require collateral and can be approved in relatively fast time, as such they have a hassle free application process.
