Similar to any other personal loans you can get from anywhere, personal loans simply mean that you are borrowing money from the bank in which you will promise to pay the bank back with a fixed rate at a set number of time. The loan period can differ from 12 months to about 10 years and interest rates will differ accordingly. Unlike any other car loans or housing loans, personal loans aren’t limited to any specific purpose or tied to any asset or collateral.
And since that personal loans can be used for any kind of personal reasons that don’t have to be approved by the bank, you will be uncertain about when its a good idea on to take on the personal loan, and when it could be considered or declared as a bad financial decision to get one. Here are a few ways that personal loans can help you to manage your finances accordingly.
1. To consolidate your outstanding credit card debts.
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The one common reason that people opt for personal loans from banks is to consolidate their multiple credit card debts. Getting a personal loan to help out in your credit card payments will not only allow you to combine all your credit card payment won’t only allow you to combine all your credit card debts into one single payment, it may also work out cheaper for you although it seems counter intuitive to pay your debts off and at the same time , incur more debts. The key difference that makes all the difference here are the interest rates.
2. Once in a lifetime expenses
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Yes, what about those you have spent long time planning for? For instance, paying the down payment on a house. Obtain a personal loan to cover the payment is quite common nowadays paired with the housing loan. This also happens when developers design schemes that reduce the down payment figure.
Another example of having a personal loan is to finance your wedding. As this is an easy way to ensure that your dream wedding becomes possible, you should take enough amount to cover up the necessities of the ceremony and its certain that it can be repaid by the expected contributions from guest and family. Remember, just because you took a loan doesn’t mean that you can make it a big one as they have to repaid!
3. Emergency, repairs, replacements.
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Our parents have thought us to keep aside some money from a young age and “save for a rainy day”. Of course this does not mean that we have to accidentally throw a ball at our neighbours window and then pay for it. This applies when we have an aging car for example, and we have to pay to get spare parts replaced or repair some of the things in the house. This means that those who did not subscribe for any extensive insurance policies have a higher risk of paying for one of these emergencies at some point or the other.
This means that you have to prepare for the unexpected and when it happens, this is when you don’t have enough funds to cover up for your unwanted expenses. And this is why you should sign up for KFH Murabahah Personal Financing- i which offers you personal for up to 10 years and if you are looking for a loan that allows you to make smaller, more affordable payments each month. Do take note that the longer your loan tenure, the higher the interest you have to pay.