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Are loans good or bad for you?

By Finserv MARKETS - Feb 26,2019
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Are Loans Good Or Bad?

Due to widespread consumerism and capitalism, Loans have now become a necessity in today’s world. People take out loans for various reasons such as marriage, education, travel or even for the construction of houses. But are they financially a better option or not?

With the entry of various private banks, consumers are often spoilt for choice with the options offered to them in terms of loan application and banking. There are so many different types of loans available for various situations and scenarios.

Is it better to apply for a loan or should you save up money in the traditional way?

Saving up money in the traditional sense takes far too long. It is almost impossible to save up a large sum of money for a sudden medical expense or other such situations. Hence, it is quite obvious that applying for a loan is the smarter of the two options.

Hence, with a loan, it cannot be deemed as either good or bad. It will be the loan type and the outcome of it which can be classified under the above categories.

All parents think about best possible higher education for their children. Hence, funding the rising cost of education is very important. With Finserv MARKETS, you can avail different types of loans and give the best education to your children.

What qualifies as a good loan?

From the top of the list, a personal loan taken out for the education of a family member or even for self would obviously be considered as a good personal loan as mentioned above in the example. But in any scenario, if the cost or the interest rate of the loan is too high, it’ll obviously not be a good option and would, therefore, be qualified as a bad loan.

Another scenario is when you apply for a loan to fund your own house or residence.  If there is an appreciation in the value of real estate, then it’ll also be like a source of income or retirement or in certain cases, a source of reverse mortgage.

Even when you make plans to apply for a loan, you always have to keep in mind the two types of personal loans; secured loans and unsecured loans. Secured loans as the name suggests would have some sort of collateral attached to it in order to secure the credit.

An unsecured loan obviously doesn’t have any security attached to it and therefore comes at a much higher interest rate and price than the secured loans.

When considering applying for a loan, it is always better to choose a secured loan, because due to the obvious reason of security and collateral attached to it.

Due to the rampant consumerism in today’s world, more people are landing in debt and that too quite frequently. If you are in a debt for a longer duration, the more terrible will be your financial stress. If you are using a credit card, make sure that when you borrow on a credit card, the duration should not last for more than thirty days or a maximum of forty five days.

It is however important to note that the interest rate charged on such cards is significantly higher than an unsecured or a secured personal loan.

Eventually, loans are taken to improve the quality of life and it is not the action of applying for the personal loan which can be classified as good or bad, but rather the purpose behind it as well as the rate of interest which make a loan fall into the above either categories.

“Finserv MARKETS, from the house of Bajaj Finserv is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!”


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Bajaj Finserv Direct Limited ("BFDL") is primarily engaged in distribution of financial products and services through its digital platform (“Bajaj Finserv MARKETS”) and inter alia renders services of customer acquisition, providing preliminary credit support activities, fulfilment services and post-acquisition customer services to Banks, NBFCs, HFCs. BFDL is also a registered Corporate Agent (Composite) under valid IRDAI registration number: CA0551 valid till 10-Apr-2024 for solicitation and servicing of Insurance Products. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522