Personal Loan

Top Reasons to Know Why People Mostly Opt for Personal Loans


Personal loans are unsecured loans that can be used for many things, like big purchases, consolidating debt, paying unexpected bills, etc. These loans usually take between two and six years to pay back. They could take longer depending on your situation and how regular you are with payments.

Here are some of the most common reasons why people get personal loans:

Pay for a new business

Commercial banks often give specific business loans to companies that have been in business for at least 20 years and have a good credit score. Unfortunately, a new business can only get this kind of loan once it has been around for a while and has a good credit history. Because of this, many new businesses are now using personal loans to get their needed money.

Medical expenses

There are some costs that insurance doesn’t cover that come with medical emergencies. These costs can add up much faster than you might think, whether you have insurance or not. People often find that a Personal Loan is the best way to pay for these costs, such as those for dental and eye care, when they come up.


Most of the time, a person can count on a personal loan whether they want to go on their dream vacation or need to travel quickly. If the borrower has good credit and a steady income, it would be easy for them to get a personal loan and start their trip whenever they want.

Wedding festivities

Traditional Indian weddings are very big parties. Due to the many religious rituals after the wedding, marriages can last between three to seven days. Hosting hundreds of guests for such a long time is a costly undertaking. There are costs for the clothes, decorations, gifts, photographers, and performers, among other things. No matter how well someone plans for this expensive event, things will always be added at the last minute. They will cost more money. Many people get a personal loan to get this money quickly so that the most important event in their lives can be celebrated with all their hearts.

Moving charges

Moving is often more expensive than people expect, whether they are just moving from one house to another in the same town or from one city to another. After all, you need to hire a moving company, put down a deposit on a new place to live, pay the broker, and do many other things these days. These costs can quickly add up, so many people who want to move bases use a personal loan to pay for the trip.

Purchasing equipment

Smartphones, gaming consoles, the newest laptops and desktops, home appliances, and many other things are now seen as needs instead of wants. Almost all the best banks in the country are eager to offer Personal Loans to meet the growing demand for high-end devices.

More and more people are using personal loans to pay for their commitments and goals. But each borrower must remember that it is their job to pay the relatively high-interest rate. Also, it’s important to pay back the loan fully and on time so it doesn’t hurt the borrower’s credit score.

Getting a better credit score

People are also increasingly turning to personal loans to raise or lower their credit scores. People with no credit history or a low credit score can now apply for a personal loan. If they pay it back on time, their credit score will increase as expected. The Credit Bureau would think it was fine if you paid back your loan on time. But the length of your loan would help you build a long credit history. This would be to your advantage.

A high credit score will help you in the future when you want to borrow more money, like for a house or a business.

Debt consolidation

This is one of the most common reasons people get personal loans, especially in the modern world where too much credit card use traps many people in debt. Personal loans have high-interest rates (11-22% per year). But they are still cheaper than credit cards. Credit cards have interest rates of more than 35%.

Also, some people have more than one Credit Card bill to pay each month. It could be hard to keep track of each card’s billing cycle. In these situations, combining all of your debts into one loan and paying them off with a personal loan is a better option. This is cheap. It also saves you time. This choice also helps the borrower’s credit score, in the long run, making it a win-win situation.

Financing a car

A personal loan is one way to pay for a car, boat, RV, or even a private jet. There’s also one way to pay for the car if you’re not buying it straight from the manufacturer. With a personal loan, for example, you could buy a used car from another customer without having to spend all of your money.

For a vacation

Everyone needs a vacation. Sometimes people are not able to take a vacation because of financial problems. A personal loan for travel is the way out. Once you’ve had a break from your normal routine, you can choose a time to repay the loan and stick to it.


Personal loans can be used for just about anything. This is why they are called “personal.” Always remember that the loan will need to be paid back at some point, no matter what. You borrow the money when you get a personal loan to pay off credit cards or plan the perfect wedding.

You must pay it back, plus interest, when the loan is due. Personal loans are a great way to pay for big purchases and get rid of multiple debts at once. However, you should still be smart about how you use them. You can go to Piramal Finance to get more information about personal loans.