Banks and lending institutions provide personal loans for borrowers. While typically personal loans are a very flexible financial tool that can be used to finance a plethora of things, including but not limited to paying for vacations, weddings, medical expenses, interest payments amongst several others. However, at times, lending institutions place certain restrictions on what you can use your personal loans for. With Finserv MARKETS, you can get personal loan approval and the eligibility limit online within minutes and disbursement within 24 hours with flexible repayment options, taking care of all your financing worries.
What is a personal loan?
A personal loan is defined as being a typically unsecured loan. It is different from a home or a car loan, which are secured loans, meaning that the house or the car you intend to purchase will be a collateral and the lending institution can seize the asset if you fail to make any payments. However, personal loans, on the other hand, are unsecured loans, which means that the only collateral the lender has is your promise to pay. Due to the same, lending institutions and banks check your income and your credit score before approving your personal loan to ensure that you have the capability to pay it back. Once your loan has been approved you can use the funds from the same for any personal expense, and usually personal loans are used for short or medium term financing. Although the personal loan eligibility vary from bank to bank, the general assessment criteria include age, occupation, income and capacity to repay the loan.
What are personal loans typically used for?
While the usage of a personal loan can vary from person to person due to their flexible structure, typically borrowers use personal loans for similar reasons. One of the most common reasons individuals take out personal loans is to pay for any existing credit card debt as personal loans usually have a lower interest rate than credit card debt. Individuals also use their personal loan to cover for any unexpected medical emergencies and payments which may not be covered by health insurance.
Similarly, people typically use personal loans to improve upon their house or make any repairs. Other uses of personal loans usually could be to get your car fixed or have any bigger parts of your car replaced. Often individuals take out personal loans to cover costs that may be incurred when they are moving, such as paying for packers and movers, amongst others. Finally, another very common use of personal loans is to pay for vacations.
What can I not use them for?
As mentioned earlier, typically, personal loans are very flexible and versatile due to which people use it for a plethora of reasons. However, financing authorities and institutions do have some restrictions about what you can use your personal loan for, due to which it is necessary to specify what you will be using the funds for in your application form.
Typically speaking most financial institutions will not allow you to use your personal loans for gambling and any other illegal activities. If you are planning to use the funds from your personal loan to set up an illegal venture, such as selling illegal products, banking institutions and lenders will forbid it. It is not allowed to use funds from a personal loan to gamble at a casino or for betting. Apart from this, there are no other restrictions on the usage of personal loans. However, in order to be financially prudent, one must make sure that you are not availing a personal loan for a splurge. Although personal loans offer more lucrative interest rates than credit cards, making them very tempting, you should not spend beyond your means.
Whatever you decide to use your personal loan for, ensure that you have the capability to pay it back in a timely manner. Always ensure you do not borrow more than you can pay back. Finserv MARKETS offers personal loans for up to Rs. 25 lakh with flexible repayment options and tenures ranging from 1 year to 5 years (with an annual renewal option for interest servicing loan). In fact, you do not even have to provide any kind of security or guarantee and the loan will be approved in less than 24 hours.
You can also read about how to get a personal loan with bad CIBIL score.
Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!