Occasions to go for a personal borrowing

What is a “personal credit facility”? when should you opt for a credit facility of this nature? There are several types of lending; you go for a housing loan or mortgage when building or buying a house. Vehicle or auto loans are specifically for buying the car of your dreams. Similarly personal loans are earmarked for personal emergencies, wants and needs. However, the difference between a housing, auto and a personal credit facility is that both the former has a sort of a mortgage – the house and the car- but the latter doesn’t. in that, it is known as an unsecured credit facility; because of this very reason the interest rates are higher.

When to go for this?

So when would you want to spend more than a normal situation and go for a personal credit facility? There could be some instances; for example, if you do not have an emergency fund, a personal loan could be the one way out. It also can be an ideal solution to shut off all your credit card debts, when you decide you are done with that evil. One may ask why would I want to take one credit to close off another? The answer is, interest rates and hence what you pay to the bank in a fast cash loan are relatively lower than what you have to pay for a credit card, hence saving you money.

Are you still studying?

Student loans are popular among everyone. If you are a student, you will also have one of those going on. However sometimes you exceed the one and would want to go for another but find that it is impossible. In that situation, you can go for a simple personal credit facility with a relatively lower interest rate. Of course, you will have to work part time to pay it off. However be careful when obtaining credit for study purposes; student loans come with tax deductions when you come to the filing stage however a personal credit facility won’t have that.

Miscellaneous uses

Are you getting married? Do you want to finance a sudden purchase such as a rather profitable business going on a sale or even a commercial land piece or some such thing? Then a personal credit facility will be an ideal opportunity to cover for that. However, remember that a wedding is a cost rather than an investment as opposed to buying a business or investing in stocks, so repayment has to be thought through first. Before you go for a personal loan for a miscellaneous use though weigh the pros and cons seriously.

Repayment of a loan must be done on time. Credit score is best kept as low as possible.

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