Personal loans as discussed earlier are unsecured loans that are instant sources of funds to meet your immediate requirements. Many banks and financial institutions offer personal loans with various added benefits. These loans because unsecured don’t require collateral to back them.

Now you may have seen many people who generally keep living a low-profile life and generally keep spending everything only from their savings. Such people often run away from loans and credits thereby avoiding them.

But, do you know personal loans are more beneficial for the long term than savings?

There are very few who will tell you this financial management secret.

Let us find out how personal loans can be a better option than savings.

So, when you hear the term personal loan you don’t focus on the word personal, you generally tend to focus on the word loan and emphasize it more thus ignoring its benefits.

A personal loan is mainly designed to make your personal financial life simple. There are other wealth management mechanisms too such as liquid funds and assets which can help you in times of immediate need. One such fund is savings in the form of money saved in a bank account. We always tend to choose savings over loans for our minds are made to believe it is a safer way to avoid the risk of not being able to pay back.

But there are various reasons which can break and change your entire perspective about loans and savings.

Let us see 5 reasons that can justify our statement:

Calculated risks are part of financial management:

Calculated risk is indeed a part of financial management and a personal loan is the best possible calculated risk that one will ever take. In case of emergency, we always try to use savings. But, what does it do? Using your savings will eventually reduce it more which you can keep safe for more grave needs in the future. Hence, it is always advisable to use options like a personal loan when in need of small emergency funds.

Help you with urgent and immediate needs:

When you need money and you don’t have it personal loans can be the best option to go for. By money, we mean the extra money which is more than your savings. Sometimes, savings are not enough to fulfill some needs, and using other options to club it with savings can be a little tedious and can cost your pocket more. Hence, in such situations, it is better to get a personal loan for the entire amount while you use savings for other purposes one of which is paying off the loan. This will help you get through your urgent needs immediately.

Pay your bills on time:

When it comes to expenses you have to always pay your bills on time and secure all the basic amenities for running a household. Sometimes this can be difficult along with some other expenses which are part of your dream. So, to support your dreams for time being, you can get a personal loan while you keep your savings for bigger transactions later. This way you will also be able to pay off your debts on time rather than losing the necessities.

Fulfill your dreams:

Personal loans are the best way to fulfill your wishes and make your dreams come true. It is the most effective way of planning the best possible things in your life like weddings, home renovation, traveling, etc. This way you can keep your savings secure and yet do whatever you want with the help and backing of personal loans.

Credit Score:

Taking a personal loan is the best way of showing your credibility. Credit score has become a very important part of our financial life. A person must have a good credit score which is mostly 750 and above in order to enjoy various financial benefits. Borrowing a personal loan and making ardent efforts to repay it back enhances your financial image and helps you build your creditworthiness. Hence personal loan is one of the best ways of proving that you are financially reliable.

These are the best possible reasons why you can choose personal loans over savings which is a very important part of your financial management. Hence in the future whenever you have any kind of need or emergency try opting for a personal loan and taking a such calculated risk to help save more in the future.

99Creds offers a variety of personal loans with a few of well-known banks in India. To avail of the facility of personal loans check our website 99Creds today.