With the festive season almost upon us, it’s time to start thinking about shopping and gift-giving. While you may want to save up enough money to cover gifts for everyone you know, it is more important to save for a rainy day. If you do not have such savings and encounter unexpected expenses that prevent you from spending money on festive expenses, you can apply for a personal loans during festival season. Some major benefits include easy loan sanctioning, attractive interest rates, and flexible repayment options. These loans are generally easier to obtain during the holiday season than at other times of the year because people spend more money during this time. Fortunately, there are ways to fund your shopping expenses even if you do not have enough money to pay for them. Here are some advantages that you get when you apply for a personal loan during the festive season.
What is a Personal Loan?
Personal loans are a type of unsecured loan, meaning that you don’t need to offer collateral. You can use it for anything from buying a car or renovating your home to consolidating your debt or going on vacation. During festivals, there is an increase in the demand for home appliances, gold, property, vehicles, and festive apparel. The money is typically given to you through monthly payments over five years, and interest rates can range from 5% to 35%.
Top 8 Advantages of Getting Personal Loan at Festive Season
During the festive season, there are many benefits you can get from banks. To compete with each other, they give many benefits to the customer. Here you can read the top advantages of getting personal loan at festive season
- Lower Interest Rate: Most banks and NBFCs offer low rates during the festive season in an effort to attract new customers. With banks giving out more loans to compete with each other, you can get a better interest rate during the holiday season. If your credit history and CIBIL score are both good, you can try negotiating the interest rate with the lender.
- No Fixed Deposits Requirement: You do not need to lock your money in a fixed deposit for any specified period, so you can withdraw it at any time or use it for something else as well.
- Discount on the Processing Fee: The processing fee for your loan is usually 1%–3% of the total amount being borrowed. But many banks waive this fee during the festive season because they want you to be their customer for life.
- No Collateral: Unlike if you were taking a home loan or car loan, there is no requirement for collateral in case you default on your payment. All the bank wants from you is that the repayment be done every month without fail.
- Easy Approval: Banks and NBFCs have special teams that look into these types of loans only during the festive season, which makes it easier for people to get approved with fewer documentation requirements.
- Flexible Repayment Tenure: When you take out a loan to pay for your holiday expenditures, you have time to repay it with no urgent financial obligations hanging over you. The whole loan can be repaid over a custom-designed payment period, according to the client’s capacity to pay. That’s because personal loans don’t require any collateral, so there is less risk for the lender too.
- Less Paperwork: Personal loans don’t require much paperwork, unlike a home loan or a car loan, where all sorts of documents are required, including salary slips, property tax records, etc.
Tips to Get a Personal Loan Easily During the Festive season
Here are 4 tips to get a personal loan easily at festive season. These tips help improve your chances of getting better deals.
- Maintain a healthy credit score: A high credit score is one of the most important factors for approval. You can maintain good credit by paying bills on time and keeping balances low on your cards and other loans. Having a good credit score will make it easier for you to get a personal loan.
- Calculate monthly instalments (EMIs) carefully- It is essential that you find out how much money the bank would ask from you as an EMI before finalizing your decision. If possible, go for EMIs that last less than two years so that you won’t be left with any balance at the end of the tenure. Make sure that EMI does not exceed 40% of your net income after deducting taxes and PF contributions, because anything over this limit could put undue pressure on you.
- Compare Different Loans: To get the best deal during the festive season, you need to keep an eye on different banks, NBFCs, and financial companies. Also compare interest rates, tenure, processing fees, and other charges. The best way to compare different loans is by checking financial service websites.
- Understand your requirements: Always understand your requirements before applying for a loan. For what purpose do you need a loan? Is this loan good for me? Is any other option available? For example, there’s no point applying for an expensive personal loan when you really want only Rs. 5,000 to buy new clothes or accessories for Diwali.
Personal loans can be a great way to put your money to use during festive times by giving you access to more cash than you would have otherwise had. During the festive season, you get lots of benefits on personal loans like lower interest rates, less paperwork, flexible repayment, etc. However, there are some disadvantages too. Personal loans often come with higher interest rates and cost you more over time. So it’s important that before you sign up for one, you think about how it will affect your financial situation and whether or not it’s worth it. Also, make sure to check out the Piramal Finance website to get the best deals and offers on getting personal loans.