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How to Use a Personal Loan to Reduce Your Financial Pressure this Festive Season

How to Use a Personal Loan to Reduce Your Financial Pressure this Festive Season

The festive season is a time for new beginnings, good cheer, health, and prosperity. This time of the year is considered as an auspicious time to start a new business or make new purchases. You may, therefore, invest in a new home, or buy a vehicle, gold, jewelry, electrical appliances, and apparel, besides many others.

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While you may consider using your lifetime savings to make such purchases, savings are meant for contingencies or to cover major financial obligations that may arise. Instead, you may avail of a personal loan, also known as an unsecured loan, from a bank or Non-Banking Financial Company (NBFC). The obtained finance may then be used to meet your festive expenses without any financial strain.

Following are benefits of such loans.

1. No limitations on end use

Finance options such as car loans, education loan, and home loans have to be used for their specified purpose. However, lenders providing unsecured loans do not question the intent of the loan. Hence, you may borrow such a loan and use it to buy gifts for your family, go for a holiday, or buy anything during this festive season.

2. Lack of collateral

As the name suggests, unsecured loans do not require a collateral as security against the borrowed amount. This means that you do not lose ownership of any asset in case of non-payment of the loan.

3. Flexible repayment plans

Lenders these days offer customized repayment schemes that offer a high degree of flexibility to their customers. Some of the flexible plans offered by lenders are balloon plans, Step Up plans, Step Down plans, and bullet flexi plans.

4. Tax benefit

If you are buying a new home or are seeking to pursue further education, you may avail of tax benefits on the interest paid towards the loan. This will help to reduce your taxable income to a great extent.

Borrowing a loan during the festival season reduces the pressure towards having to make last minute arrangements for cash. It helps you purchase the items you seek even if you are cash strapped at the moment. The following points highlight how a loan eases your financial worries during the festive season.

1. Provides monthly repayment option

Borrowing a loan protects you from making a huge one-time payment. You may repay the amount through regular Equated Monthly Installments (EMIs), thus reducing the burden on your finances.

2. Avoids peer-to-peer borrowing

You may borrow from your social circle of family or friends. There are chances that the dynamics of the relationship may change in case something goes wrong. Seeking a loan from a bank or NBFC is, therefore, a wise decision.

3. Offers the benefit of lower down payment

With lower down payment, the rest may be paid throughout the tenure of the loan. This helps you budget accordingly and reduces any sort of financial strain.

A personal loan indeed offers numerous benefits. You may, therefore, borrow such a loan and meet all your festive expenses rather easily.

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