How Can You Put Personal Loans to the Best Use?

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Life often presents us with many unprecedented situations where all our plans may fail in an instant or over time. The current global COVID-19 pandemic is one such situation that has brought the entire world to a standstill. Most of the business activities have come to a halt, while many others have switched to the online mode of work these days. In between all this unrest, one thing is common amongst the masses – the risk of financial insecurity. 

As the nationwide lockdown continues, you might be facing a financial crunch. You may also have important purchases or expenses in the pipeline, and now you might be worried as to how you will meet them. However, for all such situations, a personal loan can provide you with the right kind of support. It provides you with easy access to funds when you need them the most. Depending on your eligibility for the loan amount you seek, you can get the personal loan disbursed almost instantly. 

Once you have the loan amount transferred to your bank account, here’s how you can plan to use it:

Household Expenses

Amidst the COVID-19 lockdown, employees across several industries are witnessing significant pay cuts. If your employer has also notified you about the salary cuts, it means you need to look for another alternative to spend on crucial things. A personal loan can help you tide over the situation with less financial stress. 

To adjust to the new normal, you can use the loan amount to deal with household expenses, pay credit bills, and existing loan EMIs, if any, till the time the situation normalizes. However, make sure that you utilize the loan amount to meet important expenses only and not on unnecessary spending. 

Medical Contingencies

A healthcare emergency often comes as an unpleasant surprise and can drain your finances significantly. If you have an emergency fund kept aside for such needs, you never know for how long it can withstand the financial burden of a critical illness. It is here that you can utilize a personal loan to meet the medical expenses without disturbing your regular earnings. Depending on the loan amount and repayment tenure you have chosen, you can easily plan paying the loan back in affordable EMIs.

Another way to stay prepared for medical emergencies is to buy health insurance for yourself and your family members. You can either opt for individual health plans or family floater plans to get adequate health cover. 

Contingency Reserve

Planning for personal loan repayment is also essential in these challenging times. Once you have borrowed a personal loan from a bank, you must pay the EMIs on time to avoid facing any penalties in terms of high-interest charges. 

One way to ensure that you can repay the loan timely is to build a contingency reserve from the loan amount itself. It means keeping aside a portion of the loan amount to repay its EMIs. Depending on your regular expenses, you can set aside an amount equal to the six-months EMIs for the same loan. This way, you need not worry about loan repayment as a financial burden. 

How to Check Your Personal Loan Eligibility?

As a breadwinner in your family, you might be going through tough times amidst the Coronavirus outbreak. A personal loan can help you steer through the crisis while you manage the finances wisely. Before you apply for the loan, you must know about the loan eligibility. 

Check your credit score and consider your needs as well. It is pointless to apply for a personal loan of Rs. 10 Lakhs when you are only eligible for a loan of Rs3-4 lakhs as per your income. Also, consider borrowing personal loans from a renowned bank such as Axis Bank, as it offers collateral-free loans at competitive rates along with seamless customer support services. Spend money wisely to build the foundation for a burden-free future.