The festive season in India is an eventful time of the year. With sales, gift giving and other expenses, money is sometimes tight. During such times, personal loans are an asset.
What is a personal loan? Simply put, a personal loan has no security or collateral. It requires a minimum amount of documentation, and you get a fixed duration to repay the loan. Payments have to be made every month, called equated monthly instalments (EMIs). There are many types of personal loans. However, during the festive season, only one is important: festive loan.
Festive loans are an improved version of the old loans and their offers. You can get ample benefits with a loan. You can get a personal loan during the festive season with almost zero hassle and no formalities. With no security or collateral and more bonus deal, this festival might be the right time for you.
Read this article to understand some important factors regarding a personal loan for the festive season. How are they benefitting you and what are the important takeaways regarding your finances?
Why should you take a personal loan for the festive season?
Here are some reasons to apply for a personal loan for the festive season:
- Higher principal amounts: The loan amount can go up to Rs. 10 lakhs, depending on the institution.
- Your freedom: You are free to spend the loan money as you wish. Personal loans offer complete flexibility to the spender. You are not required to inform how you spend the money.
- Affordable interest rates: The interest rates for personal loans during the festive season can go as low as 11.99% per annum. You can repay this loan through financial planning and EMIs.
- Easy to apply: Lenders have set up a digital process that is easy to follow and available anytime, anywhere. You can complete an online application in a few minutes and get a personal loan for the festive season.
- No collateral required: The best thing about personal loans is the lack of collateral. With no security asked, it saves one from all the hassle of extra paperwork and proof. You need not submit any of your assets to get a personal loan.
- Boost your credit score: Paying back all personal loans on time is a smart financial plan. It builds a good consistent credit history which boosts your credit score. A good credit score is the best economic measure one can ever take.
- Little to no documentation: Personal loans for the festive season do not need a lot of paperwork. You should submit identity, address and income proof when applying for a personal loan.
Key factors to keep in mind
If you are looking to get a personal loan for the festive season, here are some things to remember:
- Eligibility: Before committing to the loan scheme, check if you are eligible. Look for factors like age, credit score, loan amount, interest rate, and repayment time. You must be between 22 and 60 years to apply for a loan. You should have little to no debt, and your credit score should be 750 and above. You can get up to 60 months to repay the loan. Make sure to analyse each of these factors to decide on a personal loan for the festive season.
- Do not overspend: Getting a lot of money may be attractive, but you must understand how to use it wisely. Make a budget and buy what is necessary. Do not unnecessarily overspend and fall into a debt trap. Prioritise your requirement and purchase what is needed. Personal loans can be tempting because they offer easy repayment terms. Therefore, before applying for a loan, evaluate your requirements.
- Choose the right lender: Some lenders or financial institutions hike interest rates for profit. Research well and find a suitable loaner. Understand the terms and conditions before making any commitments.
- Understand debt: Debt is a major liability you can have. Each level of financial planning should be well thought out. Debt traps can pull you down and leave you with unwanted loans.
- Avoid going to too many loaners: Loan applications can be rejected if you apply for loans with many lenders. Another drawback is taking a loan you cannot repay. This will reflect on your credit history. Conduct proper research and reach out to the right financial institution for a personal loan during the festive season.
- Think about EMI and its consequences: The question is: will you be able to repay for the extra items taken through EMI? A low EMI lasts for a much longer period, and you should consider whether you can afford the EMI. You should have a solid base of incoming salary to pay for all these. Hence, it is necessary to avoid this trap and consider the alternatives associated before applying.
- Future prices: Give a brief thought about the products you buy and their future market value. Some items’ value falls after the festive season. Study the rise and fall of product prices to avoid such incidences. Be practical in what and how you invest your money to make a profit.
October to December is the most awaited period on everyone’s calendar. Taking a personal loan during the festive season is a step forward to fulfilling your dreams. It offers many benefits to an individual or a family. Being wise and getting a personal loan may be a good plan. However, finding the right institution to approach for a loan might be difficult. Understanding all these keywords is highly important for better finances.
Piramal Finance can help you get the financial assistance you need. Get in touch with Piramal Finance now.