There are certain events in life for which any amount of preparation does not feel enough. By preparation, we meant financial preparation. Regardless of your financial stability, you will still feel short of certain things. Now, the aforementioned situation is for people who are financially sound. However, most of us aren’t financially stable. Thus, we cannot bear to pay for these important events right from the pocket.
In such cases, we have options to borrow from financial institutions. There are various Non-Banking Financial Companies which are offering Personal Loans at an attractive rate of interest. Apart from the Personal Loans, you even have an option to spend from your credit card. However, a Personal Loan is any time the most preferred option over a credit card, if you have a decent financial standing.
Personal Loans will help you get a lower interest rate than a credit card when it comes to long-term financing. There are several events where opting for a Personal Loan is a better option than using a credit card. Those are:
- One-Time Events: Most one-time events such as weddings require a high amount. Parents tend to save money for marriages right from the beginning. However, the saved amount is never enough in this inflated market, where prices of even the smallest commodity are sky high. Thus, Personal Loans come to the rescue by not only offering longer tenure but will help you get a better rate of interest as well.
- Health Expenditures: Charging health expenses to a credit card is not a wise idea. Regardless of an unexpected medical expense or a bill for an emergency, you must choose a Personal Loan as the viable option. Personal Loans will help you avail a higher amount and for a longer tenure. Thus, not only will your urgent requirement be met, but you will also have the time to repay the debts without stressing too much about them.
- Start-Up Expenditure: Any financial expert would advise that you do not use your credit card for start-up capital. It is not favorable. A Personal Loan is a much better option than that. There are various Non-Banking Financial Companies that encourage start-ups and provide Personal Loans at an attractive rate of interest. Thus, look out for these NBFCs when you’re looking to fund your start-up.
- Debt Consolidation: If debts are piling upon you, then there is a good chance that you won’t be allowed to consolidate it using credit cards. However, with Personal Loans, you can easily deal with consolidation. A personal loan for debt consolidation will help you and there are Non-Banking Financial Companies that will help you deal with the debts in a proper manner.
- Home Improvement: Sellers on various e-commerce sites promote using a credit card to complete payments, thereby, offering various discounts. However, these are rare conditions that work only during festive periods. But what about when you want to make some home improvements. Using your credit card won’t be advisable. In such a scenario, it is suitable that you borrow a Personal Loan, as the rate of interest that you will be required to pay under a Personal Loan will probably be less than the one you will have to pay with your credit card.
These are the circumstances under which you should prefer Personal Loans over credit cards. Not only does it offer affordable repayment, but it will also offer a time frame in which you can work out ways to repay your debts.