The current crisis of COVID-19 pandemic is not just a healthcare emergency. It has brought the world’s economy to a standstill, with many nations on the verge of a recession.
Moreover, it has come so unexpectedly and suddenly that most of us couldn’t prepare ourselves to face this situation. It has impacted us mentally, socially and financially.
Given the uncertainty of the future, a lot of people are concerned about their financial well-being. The situation is especially tough for people who were living paycheck to paycheck. If you are in a similar position and looking for an easy solution, you can consider the option of personal loans.
What Are Personal Loans?
A personal loan is an unsecured means of borrowing available at most banks and other lenders. Since it is unsecured, you don’t have to pledge any asset against this type to loan.
The terms of a personal loan involve a duration by which you will repay the bank and an interest rate. It comes with a pre-determined monthly payment structure and allows you to manage your financial woes independently.
When Should You Consider A Personal Loan?
Let’s review a few scenarios that may put you in a spot financially. For a clear understanding, let’s divide them into urgent and long-term needs.
Urgent Requirements
- Are you unable to pay rent and are on the verge of eviction?
- Have you or your spouse lost a job in the current COVID-19 crisis?
- Do you have a health emergency for which you were unprepared?
- Did you lose an earning member to COVID-19 and are now left in the lurches?
Long-term Requirements
- Do you have to pay for your child’s education?
- Are you short on funds for an urgent home improvement project?
- Due to COVID-19 crisis, mobility will become difficult. Are you planning to buy a car to manage your movements in the city?
Choosing Between Personal Loans And Credit Card Debt
These days it is possible to pay for almost anything using your credit card. Thus, it is only natural for you to question the need for a personal loan when you have plastic money.
Well, the answer lies in the amount of cash you need and your ability to pay back. Credit cards offer 0 interest loans and are an easy way to pay for your immediate needs. However, there is a cap on your credit card limit, and the interest-free duration is short.
Moreover, the interest rates on credit card loans are high and can be almost twice the interest on personal loans. If you are unable to pay your credit card dues, the piled-up bills can land you in a bigger soup. It becomes a downward spiral of debt that may trap you.
Apart from these benefits, you can use cash to pay anyone like your electrician or plumber. Credit cards will not work in such cases.
How Can You Benefit From Personal Loans?
Easy Money
With personal loans readily available online, you no longer have to worry about paying immediate bills. Availing for a personal loan is as simple as filling your details in an online form and submitting the necessary documents.
With no hopes of salary increases, personal loans are like friends who can loan you money in your times of need. And that too, without depending on anyone else. They allow you to hold your head high and be financially independent.
Instant Approval
Thanks to online personal loans, now you can get the loan amount within a couple of days. In some cases, it is only a matter of a few hours.
As you submit your loan application process, the approval may come within a few hours on the same day. In such cases, you can expect the loan amount to be credited into your account the next day.
Better Credit Rating
A positive credit score is important if you are looking for a significant loan in the future. It could be a mortgage to buy a new home or student loan to send your child overseas for higher education.
Without a good credit rating, your loan requests may get denied from the banks. As a matter of fact, availing credit cards may also become tough without a good credit score.
You don’t have to visit a bank if you are unaware of your credit score. It is as simple as looking up credit score check uk on Google.
Flexible Borrowing Options
Personal loans are versatile and can fulfil all your financial needs. With no threshold amount on the minimum loan amount, you can even apply for a loan of 500-pound.
Moreover, you can choose the tenure amount so that you can repay your debt comfortably. Monthly instalments allow you to manage your future expenses in a planned manner.
Debt Consolidation
If you have several loans, it may get overwhelming to keep a track on their payments dates and amounts. In such cases, you can use personal loans to repay the other loans and consolidate your debt into one place.
As personal loans come with an enforced monthly payment structure, it also works well for those who want to inculcate discipline in their debt repayments.
Cooling-off Period
Most personal loans come with a 14-day cooling-off period. It means you get 14 days to cancel or withdraw your loan amount. If you cancel, you get 30 days to pay the money back to the lender.
The 14-day period starts from the date when the loan agreement is signed or the day when you receive it. Whatever happens later is considered to be the cut-off date from when this cooling-off period starts. This clause allows you to keep money on standby for unexpected situations.
For instance, you know that a family member has to undergo surgery. However, there are certain risks involved, and the medical bills may increase in case of complications. The cooling-off period allows you to sail through such unexpected situations.
Conclusion
With easy personal loans, you no longer have to worry about your financial woes. The fact that they are convenient and quick makes them the best option in your times of need.
