As the new year approaches, there's an eagerness to craft a fresh financial plan and get your affairs in order. A personal loan could be just that thing to help you do that. The new year is a moment to reflect on past financial practices and embrace a proactive approach towards future prosperity. Though a personal loan can be a double-edged sword, an unsecured form of borrowing can also provide you with access to funds for multiple purposes and help you achieve financial freedom. The new year becomes an opportune moment to not only set goals but to strategically utilise resources to build a solid foundation for financial success. In this article, we will see how a personal loan can give you the opportunity to achieve your financial goals and how to strategise to optimise your finances.
The first step you need to take before applying for a personal loan is to define your objectives and evaluate your financial situation clearly. Identify your financial goal, what it is you wish to achieve with the money, and how much you would need. Check your current financial standing, including all your expenses and debt. With a good picture of this, you should get a better understanding of how a personal loan can fit into your financial goals.
Advantages of Personal Loan
To understand how a personal loan can help, you need to first understand the benefits of a personal loan.
Unlike other loans, personal loans don't need to be taken for a fixed purpose. It's an unsecured loan, meaning you don't have to provide collateral. You can use the loan for your requirement, select the repayment term, and personalise your monthly payments to best suit your needs.
Personal Loan and Interest Rate
A personal loan offers a lower interest rate when you compare them to other forms of credit. However, you need to maintain a good credit score to enjoy a low personal loan interest rate.
The most significant advantage of a personal loan is that, with the current technology, these loans can be approved almost instantly. L&T Finance can provide an instant personal loan to fulfil your financial goals.
How a Personal Loan Can Help You
Improve Credit Score
Taking a loan responsibly and repaying it without defaulting can help you improve your credit score. This, in turn, will create opportunities for a better personal loan, and the interest rate will be lower.
Consolidate High-Interest Debt
If you already have multiple loans with high interest, you can consolidate your debt by opting for a personal loan with low interest rate. By simplifying your repayment strategy, you can also save money. Instead of paying the individual interest rates of each loan with a personal loan, you can use it to pay off your debts and pay a more affordable EMI.
Fund Major Purchases
The freedom of a personal loan allows you to apply for it without a specific purpose. A personal loan can be used to renovate your home, wedding expenses, fund a vacation, or purchase a vehicle. A personal loan can help you avoid dipping into your savings for these expenses.
Manage Unexpected Expenses
The quick nature of personal loan approval can act as a safety net for any financial emergency. Remember, if you are borrowing money, only borrow what you need in order to avoid unnecessary debt.
A personal loan can help you increase investment opportunities. By using money from a personal loan to fund a business venture or further your education, the return on investment in a few years could exceed the cost of the loan. Remember, you must still repay the loan while investing and not risk damaging your credit score.
How to Apply for Personal Loan
Applying for a personal loan has become a seamless experience with companies using advanced algorithms and automated procedures in order to approve loans faster. PLANET by L&T Finance allows you to apply for multiple types of loans all in one place. Register on the app with all your details, and for a personal loan apply online and experience the convenience of instant loan approvals. Using PLANET could be the best loan application process for you.
Personal Loan Eligibility on PLANET
• The applicant has to be a citizen of India
• The age of the applicant must be between 23 and 58 years
• Salaried and self-employed professionals are allowed to apply for a personal loan
• No collateral is required
• The applicant must provide a valid ID proof
• The applicant should be able to provide a valid address proof
While taking a personal loan, you must also set a realistic repayment plan to repay the loan.
Calculate Loan Affordability
Since personal loans are customisable, you can calculate your monthly repayment. Ensure your EMI fits within your budget, and try avoiding borrowing more than you can afford to pay back.
Read Offer Documents
Remember to read all the offer documents carefully. Understand the terms, fees, and repayment conditions in order to understand the loan entirely.
Practices to Follow Post-Loan Approval
Here are a few practices you can follow to help you know you're on track to achieve your financial success.
Regularly Review Your Progress
Monitor your loan repayment progress periodically and reassess your financial goals. You can always make a change to your strategy based on your progress.
If your loan has the potential to repay the loan early without any penalties, consider paying off the loan sooner to save on interest.