If you are looking to get a personal loan, then keep in mind that the best bank in the UAE will use your credit score as the primary determining factor to decide if you are a desirable candidate for this loan. Furthermore, your credit score will be used to determine how much money you will collect and what your interest rate will be.
Here are five instances wherein a personal loan can rescue you.
1. If you need to consolidate your debt
Generally, the most common reason why people acquire a personal loan is to consolidate their debt. This can work by either paying off current high-interest debt with a lower-interest personal loan or by merging present debt obligations into one personal loan to make debt repayment more orderly and less overwhelming.
By opting to use a personal loan to solidify a high-interest credit card debt, you will be in a position to receive a lower interest rate to assist you in paying off your debt sooner.
That being said, you can't use having a personal loan as an excuse not to deal with your current debt. Instead, you must view obtaining a personal loan as an opportunity to take advantage of the lower interest rate and lower monthly payments, and accelerate the time it takes you to pay off your credit card debt.
2. If you need to pay for a large purchase
There are many scenarios wherein an individual, a couple, or a family need to make a large purchase — and right away. Perhaps you desperately need new appliances in your kitchen, furniture in your living room, equipment for your business, or something else similar.
In scenarios wherein you know you need to pay for a large purchase that simply cannot wait, you can look for a personal loan to make it easier to get.
Additionally, if you are looking to purchase a product on hire purchase or credit, then it would be better to take out a personal loan and pay up front in full than add the cost to a credit card.
3. If you are facing a medical emergency
Unfortunately, there are many events and circumstances in life that we can't all always be fully prepared for. When it comes to medical emergencies, often the cash that is needed to pay the bills is unavailable at a moment's notice.
In situations involving a medical emergency, a personal loan can make a significant difference as it can aid you in paying for any necessary emergency costs without adding more stress to what you are already going through.
4. If you have just graduated
Right after you graduate from university, there is a high chance that you aren't making the amount of money that you expect to be making in a few years. In fact, those first few years after graduation can be some of the scariest, especially if you are burdened with student loans and other debts.
That being said, you are probably confident that in a few years, your situation will be different as your income finally starts to increase and reflect your higher education.
However, while it may seem harmless at the time to add a little more to the debt, if you are using credit cards to help you with living expenses right after university, then you may find your owed balance quickly adding up. A better solution to this issue is to take out a low-interest rate personal loan.
5. If you are getting married
Getting married is one of the most moving events in anyone's life, but it also can be one of the most expensive. While you could potentially spend years working and saving for your wedding, you could also finance the wedding, engagement ring, or even the honeymoon through a personal loan.
However, remember that taking out a loan, especially for such an important day, is not a decision to be taken lightly. Before you and your partner agree with this decision, you must ensure that you both comprehend the impact that this loan payment will have on your future life and expenses.
Before deciding on anything, spend some time producing a budget that examines all of the costs of the wedding and a plan for paying off everything.
A final word
As you can see, there are a variety of instances whereby taking out an easy personal loan is a useful option and may rescue you. If you find yourself in any of these situations and looking to either save money, pay for a sizeable one-off purchase, or meet an emergency need, then a personal loan may be your most excellent answer.
Have you ever taken out a personal loan? How are you dealing with debt? Let us start a conversation in the comments below!