Personal loan or dipping into your own reserves? You decide
Money makes the world go round, and it also creates several challenges in our daily lives. We all need it to secure our lives and make ourselves and our loved ones comfortable for the future. But creating wealth for the future and dealing with present-day needs all come down to proper planning and using the right avenues.
Our elders tell us to create savings for the future, and most of us do. But how do you utilise your savings? Do you build it over decades or use it for short term needs, only to rebuild it again?
Using your savings…
Not every person has the foresight or the discipline to create a large savings fund over their lifetime. It takes commitment and an unwavering focus on future goals to save money from your income every month so that it grows into a large corpus for the future. Even if you decide to save, you might go about it the wrong way. You might save whatever is left of your income at the end of the month. The problem with this approach is that the savings will either be erratic (you might not save any money in certain months) or too low.
Instead, setting aside a portion of your income the moment you get your salary is the best way to create a savings fund. If you have been disciplined about saving money for a few years, you will already have a tidy sum of money waiting for emergencies. So when an emergency, whether financial or medical, does strike you are not as taken aback by it as someone without any financial backup.
But do ask yourself this: you created the savings fund painstakingly over years. You denied yourself several small pleasures and resisted the impulse to borrow from your savings to buy expensive things. So should you break into your savings now or keep building them, even while you look for other avenues to raise the money you need?
One excellent avenue for almost instant cash is taking a personal loan.
…v/s taking a personal loan
Personal loans in India are amongst the most popular loan products, because they offer the triple benefits of ease of application, instant cash and short tenures. You can fulfil an immediate need using the instant loan, and with tenures not longer than 1.5 years, you can repay the loan and become debt-free in a shorter time frame. You should consider borrowing the loan from a leading loan app in India for convenience, ease of application, quick disbursal and easy repayment.
This is why you should consider borrowing personal loans in India:
They are offered to individuals with a proven track record of consistent monthly salary leading loan apps offer instant loans to salaried individuals working in the private and Government sector
The loan is fully available online using a good loan app. You don’t need to submit paperwork at the app’s branch office, nor show up to collect the loan cheque. The documents are uploaded on the app and the money is disbursed digitally to your bank account
Lenders do not concern themselves with why you need the personal loan. The loan is sanctioned as long as you have a good credit score and a source of income
The documentation process is simple and minimal on the loan app.
Good loan apps allow you to foreclose the loan without levying foreclosure charges. This helps you become debt-free earlier. Foreclosing the loan improves your credit rating, too
Servicing the loan with regular EMI payments helps build a good credit score
Using an instant loan for a short-term need is a much more practical approach to utilising your reserves than breaking into your savings. Savings money should ideally be kept for long term needs. You can even invest a large part of your savings to create a fixed deposit with your bank: the interest payments per month can help run your household.
How to get the personal loan
This is the easy part. Follow our lead to get the personal loan sanctioned to your account in a few hours:
Download one of the best loan apps in India. You must have a smartphone to enable the loan process. Check the app’s ratings and other creds before installing it
Set up the app as directed in a few easy steps. This entails inputting the OTP sent to your registered mobile number, and filling in email and bank details
Browse the personal loan product. Check your personal loan eligibility, rate of interest being offered, processing charges, list of required documents, terms of repayment, etc. If you have any queries, post them on the app’s chat bot or ask for a call back
Apply for the loan when you have all the information, and after you have checked your eligibility and credit score. Upload the required set of documents as directed, and await the app’s final approval
Once approved, the loan money is disbursed to your account in a few minutes. You may withdraw it for your use at once
If the loan is not approved on account of a low credit score or wrong documents, you can wait for three months and reapply with a better credit score and/or correct set of documents
You can repay the loan in EMIs using the app’s bank account. Be sure to make regular repayments, and to aim to foreclose the loan to get out of debt faster. Foreclosing the loan also improves your credit score.
Conclusion
Your savings fund should never be utilised for short-term financial needs. It is better to grow your savings fund to invest in tangible assets like a home, or to buy something expensive or luxurious , or to even serve as a retirement fund. Meanwhile, short term needs can and should be met by personal loans, as the points in the article above illustrate.
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