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Practical reasons why you might need to apply for a loan

4th October 2020 Print

There are many reasons why people apply for a personal loan. What does it represent? A personal loan is a borrowed cash that a person can utilize for many things. Sometimes it can be for something urgent, such as to pay off a debt or if he or she has emergency expenses.

At times, people utilize it to treat themselves with something special that may not be as urgent as the examples we mentioned above. At the end of the day, it doesn't matter why you need it. What matters is that you are familiar with the rules and paperwork required in this situation.

Sometimes people are not sure whether they "have the right" to apply for it. If your credit score is fine and you do not have a bunch of other loans, then there's no reason to be ashamed of it. There are numerous reasons why people apply for loans, and we will list the most common ones.

When To Do It?

Debt Consolidation

One of the most common (and the least favorite) reasons why people apply for the loan is to solve their financial issues. Now, there are some people who have more than one loan or amazing credit cards that have different interest rates and balances due.

All these things may lead to some serious financial downfalls, however, luckily, personal loans are here to come to the rescue. Furthermore, if you want to acquire the loan for debt consolidation, then you are mixing all those balances into a single monthly payment. 

More importantly, if you are utilizing a personal loan to pay off the debt you will get the lower interest rates. What does it mean then? It means that you'll be decreasing the amount of interest you pay as well as the amount of time it takes to pay off everything. 

Medical Costs

Frequently, hospital expenses can be really huge, however, if you're suddenly feeling unwell then you must immediately go to the hospital. If you do not have health insurance, or it simply doesn't cover everything, and yet you do not have enough money to pay the medical bills, then there's no other way to solve this but to get a loan. At least once you get it, you will be able to relax and focus on getting better.

Funeral Expenses 

Here's another example of something unplanned. No matter how old, sick someone is, people rarely plan a funeral of a loved one, so they usually do not set some money aside. That's not a good idea.

Funerals are quite expensive. Luckily, there are places in the world, like Singapore, where you can come across some great deals concerning loans. If you happen to live there, contact a good licensed money lender Singapore to see what he/she can do for you. Those who cannot obtain loans usually ask for donations.

On the other hand, if you manage to acquire it then you do not have to worry about borrowing money from friends or family. It would be good to create a pre-need memorial plan. It will serve as financial protection in case something unexpected like this occurs.

More Common Reasons To Apply For It

Buying Expensive Things 

Many people perceive this as a silly and unreasonable step, but that doesn't mean that this person is going to spend all of the money on a pricey product/item. Maybe the rest will go on something else.


According to some studies, almost thirty percent of people use this as an excuse to apply for a loan. This can be a smart move if you are buying a car for instance. You may not be able to pay cash in full and there's a small amount left. 

What can you do in that situation? A personal loan can be of great help then because you'll be able to pay the rest with it.

To Go On Vacation

Sometimes when life becomes too stressful to handle, people feel the need to take a break. One of the best ways to "pause" your current life and do something else is to travel to decrease your stress levels.

People usually take short breaks when they cannot afford more due to their work. We all know that holiday isn't always affordable, that's why many people turn to banks or other lenders to get some money. If that's the case with you, then a personal loan can help you travel wherever you want to.

As you can see, a personal loan can practically be utilized for almost anything. We just scratched the surface with these reasons, but there is so much more yet to discover. It doesn't really matter why you want to apply for it, just always remind yourself that it must be paid back at some point.

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