What are the situations when you need a loan?
It is not always possible that you may have the exact money to pay for a requirement where you need a big amount of cash. So, how do you end up owning such things? It is only possible with a loan.
One of the main advantages of taking a loan or debt is that you can use the lump sum amount for a requirement and pay it later in installments.
Here are a few top reasons or situations when you may need a loan:
- Real Estate: Purchasing a property or land is a big-ticket investment and it is surely not possible that you may have that kind of money when you find the right property or land to purchase. Sometimes you may already have a home but may need a renovation or home improvement which requires a large amount of money. These can either be planned or may arise suddenly if you have certain damage to your home. In all these cases, you will need to go for a loan if you don’t have that much money in your bank.
- Paying off current debt: Sometimes people may have a large amount of loans due on their credit card or have a loan with a high rate of interest. To clear off such loans, one can take a loan with a lower interest rate or no interest at times.
- Health requirements: Certain hospitalization or health requirements in cases of cancer, heart ailments, or accidents, can rise quite a bit and may not be covered under medical insurance. Also, some people do not even have health insurance and will need to manage the entire medical expense on their own which can be quite a bit. Hence, to manage these expenses, it is quite possible that you may have to go for a personal loan.
- Travel plans: Sometimes you may plan a trip in a hurry and may not have the right amount of cash in your bank. In such a case taking a loan is the only other option. Of course, it is a separate matter that you may end up paying more if you take a loan than if you had the cash to pay for the bills.
- Starting up of a new business: If you are planning to start a home-based business with a small investment, you may need to put in cash to purchase basic equipment like a computer, printer, or software. Sometimes you may need to buy a few products as well and they may need you to take up a loan.
Besides these, there are always possibilities of an urgent investment or spending required for which you could need a loan as well.