As far as banking is concerned, it wouldn’t be wrong to say that the modern era has been marked by an unprecedented rise in the demand for Personal Loans. The reasons behind this remarkable spike are plenty, right from easy approvals and quick disbursals, to the freedom of using the amount as per the borrower’s discretion. That being said, Personal Loans have been quite notorious when it comes to the high rates of interest they accrue. However, they do not always have to be expensive. In fact, if you are upfront about the end use of the loan amount, and opt for a customised loan alternative, you can end up saving money! Enjoy this quick read, which talks about saving money while Taking a Personal Loan.
When you take a Personal Loan to meet the operational expenses of your business, then at the time of calculation of taxes, you can deduct the amount paid towards the interest of this loan as a business expense. This will help you enjoy tax exemption on the same.
In this case, however, you should take care that the loan is procured under the name of your enterprise, lest you may not be able to revel the exemption.
If your Personal Loan amount is being used for the acquisition of fixed assets such as land or machinery, or investments such as shares or debentures, you are eligible for a tax deduction by writing off the interest paid towards this loan as the cost of acquisition.
In case you take a Personal Loan with the intent of getting your home renovated, or that of bringing in some improvements to your residential property, you can claim a tax benefit on the same. In this regard, it is crucial that you save all the bills as evidence of using the loan amount towards the home renovation project. This would help you in claiming a deduction of up to Rs. 30,000 on the interest which you pay towards the loan during the given financial year.
There are various types of Personal Loans that you can avail of, depending on where you wish to invest the loan amount. When you take a Personal Loan with the intent of travelling, either for business or for leisure, you can conveniently save a significant amount of money as against using a Credit Card to pay for the expenses. The math here is simple. The interest levied on outstanding Credit Card bills is in the range of 22 to 42% per annum, while that on Personal Loan is rather low at 11 to 25% per annum.
Moreover, you will be required to pay off your Credit Card bill at the earliest possible to save yourself from the mounting rates, while when it comes to Personal Loans you can choose a tenure ranging from 12 months up to 60 months, as per your preference.
If you are servicing multiple loans, managing timely payments of all EMIs can be a daunting task. An easy way out is to take a customised debt consolidation loan. Here, you can use the amount from this single loan to pay off all your existing loans, thus only having the liability to pay off one loan from thereon. This will ensure timely payment of your loan.
Besides, if your debt consolidation loan is for paying off the Credit Card balance, you’ll also save on the interest outgo, owing to the same principle as mentioned in the earlier point.
When it comes to a wedding, especially one in India, there are multiple expenses that need to be made on numerous fronts. Right from catering bills to venue rent, from wedding trousseau purchases to photography costs, from jewellery bills to sponsoring the honeymoon, the bills are simply endless. Taking a customised Marriage Loan will not only help you manage the expenses conveniently but will also help you hold on to your assets, which you may have contemplated selling off.
When you take a Personal Loan like Doctor Loan, and plan to pay it off earlier than the stipulated tenure, in a bid to do away with the additional financial burden, or simply to save on the interest outgo, make sure to opt for the loan alternative with the least prepayment penalty. This will help you in paying off the loan in part or in full, as per your preference, thus helping you save significantly on the overall interest outgo.
If you wish to procure a loan amount that is higher than your eligibility, you can go for Step Up EMI Loans. In this case, your EMIs in the initial years of the repayment tenure would be comparatively lower, and would gradually increase as your tenure progresses. Of course, this option is only viable if you can foresee an increase in your revenues in the coming years.
To think of it, all aforementioned aspects make Personal Loans worth your while! After all, what more could you want from a loan, other than helping you out in your time of need, while also offering you the alternative of saving some money!
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