3 Ways to Check if You Really Need a Personal Loan in the First Place

When it comes to borrowing a personal loan, we all know that it is nothing but an unsecured loan online. A personal loan is an unsecured loan given to working professionals to meet their unforeseen/unexpected financial needs as and when they arise. Since they can be so easily availed, a personal loan is also a popular avenue for funds among salaried professionals. Now, the first rule pertaining to borrowing of any kind is to only borrow when required, and only take out the amount required-nothing more, nothing less. This is something that not all borrowers follow, however and end up borrowing even when they have no real need for an unsecured personal loan. So, we have 3 points you can ask yourself the next time you think you need an online unsecured loan. They’ll keep you in check. Read on:

1. Are You Taking It Because it’s Unsecured?

It is common knowledge that while taking out a personal loan, the borrower needn’t hive anything as security or attach any collateral against it. This makes it very convenient for the borrower, yes, but also extremely risky for the lender, because there’s nothing he can do in case if you default on the loan. The point is this – if you think you can take a personal loan that you don’t need and walk away scot-free if you can’t pay it back, you’re wrong. Granted, the lender might not come after you, but your credit score will surely drop. That is obviously a bigger disadvantage as it makes it harder for you to get loans in the future.

2. Are You Taking It Because You Can?

This is also another trap that most people fall into, but you cannot. We know that you may be bombarded with a lot of spam about ‘the best personal loan offers’ that claim to give you one ‘in just 15 minutes. But this happens to almost everybody on a daily basis, and you don’t see them taking out a personal loan you don’t need. Unless there is a real emergency that needs taking care of, and you don’t have the funds for it, it is a bad idea to simply take out a personal loan. You don’t want to pay off interest and processing fees for no good reason, no?

3. Do You Have the Repayment Capacity?

Most people, while taking out a personal loan, budget the loan EMIs along with their monthly expenses. This is a way to see how affordable the loan is, whether they can manage their unsecured personal loan payments without compromising on their day-to-day payments, and how it would affect their savings. People go ahead with the loan only if these three things are possible. You should too. You don’t wat to be saddled with debt after taking a loan you couldn’t afford. 

In Conclusion

The above three points are pertinent questions that you should ask yourself the next time yu think you need a personal loan. Just remember, it is a liability that can cost you if taken for the wrong reasons.
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