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Never Take a Personal Loan for These

The very purpose of personal loan is to meet the emergency requirements of an individual. This is of course, the easiest way to get money within few days without any collateral or security.

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Never Take a Personal Loan for These

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  1. NEVER TAKE A PERONAL LOAN FOR THESE The very purpose of personal loan is to meet the emergency requirements of an individual. This is of course, the easiest way to get money within few days without any collateral or security. Thus this is best for all times when you are in need of urgent financial needs. However, the liberties offered by a personal loan should not be taken advantage. This financial support system should be taken into consideration only when there is an actual need such as emergencies. If you take personal loans for the sake of availability it will lead to accumulated debts in the future.

  2. Do’s and Don’ts of personal Loan • Don’t Invest in Stock Market: Stock market is always an attraction for many. While some decide to play safely with small investments, others try to turn greedy for money. This is when thoughts of taking personal loan for investing in stock market turns out to be a bad idea. It is advisable to not invest in speculative activities. Of course you are looking for rich returns but what if the cards don’t turn to your favor? For any investment in speculative activities don’t consider the money for which you are paying interest. • Un-necessary Vacations: Though many suggest personal loan as a great option for vacations, it is not a best idea. The reason for this is vacation is not an emergency or need in an individual’s life. However, if your loan amount is very less and budgeted and if you have enough income to repay the loan amount within 2 years, taking loan for small vacations is acceptable. Spending on unnecessary and not urgent things should be well thought before applying for a personal loan.

  3. Consumer Goods: Most people have mistaken this aspect of personal. Though personal loan is to cater the emergency needs, it is not suggested for basic necessities.  Every individual should try to cover his/her monthly expenses with their income.  Taking personal loan just to meet these basic necessities and to purchase consumer goods will raise question on how will the loan amount be repaid. If an individual is finding means to meet basic necessities, then repaying loan amount is a huge question mark. If bank’s get to know that loan is required to meet consumer goods, then they will reject the application considering the risk associated to the repayment. • Lavish Wedding: People confuse themselves when it is said personal loan can be used for wedding purpose. There is a lot of difference between weddings needs versus lavish wedding. Basic needs of the wedding are arrange the venue, food, decoration, jewels and clothing. If loan is used for these purposes, it is acceptable. However, if the loan is used for turning the wedding to be luxuries event, such investments are considered as waste of money. It is crucial to keep in mind; lavish wedding will not give any returns. Once the money is spent it is no more yielding and returns. However, you will be commitment with your income to pay EMI continuously until the loan amount is repaid completely. Personal loan should never be used to increase your spending.

  4. Purposes such as lavish wedding, consumer goods and vacations will last only for a short period of time. If the debt for this is not paid off soon, it will last forever by taking a major share of your monthly income. It is advised to work hard to clear of the debts instead of accumulating it. Don’t take personal loan to create debt, take personal loan either to increase your investment or your clear of debts with high cost like high interest rates and other charges. • Though money can be used for many purposes, it is left up to each individual to decide when to use personal loan and for what purpose. Have a clear plan for your loan even before applying and make sure you are utilizing the loan amount only for that purpose. Banks might be ready to approve greater amounts of loan, but take loan only to the extent of your requirement. Don’t create unnecessary debts that will eat away your monthly income thus reducing your savings. • Be very selective when it comes to using personal loan and have a backup plan for repaying the loan amount in case if there is any break to your regular income.

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