A private loan refers to a loan given by an organization or individual that’s not a part of the formal banking ecosystem. There are many reasons why you may choose to take out a private loan. Your lender might have rejected your application for a personal loan. Or maybe you’re not comfortable submitting collateral against a secured loan. No matter your reason, a private loan remains an important financial tool you can use to procure emergency funds whenever required. Like personal loans, private loans are unsecured, meaning that they come without collateral as well. It is also easy to apply for a private loan. Given below are four common reasons to apply for a private loan:
1. Alternative to High-Interest Loans
Suppose you’re suffering from a month-end cash crunch and need money to make a necessary purchase. If the amount you require is small, putting it on your credit card or availing of a payday loan can be very tempting. But it can be one of the worst things to do – the APR on a payday loan is more than 100%, and these loans come with very short repayment tenures as well. A credit card is expensive too, carrying an average APR of 40-42%. Why waste money in interest payments when you can just apply for a private loan? The interest rate on these loans is much more affordable than payday loans/credit cards.
2. Home Renovations
You may want to remodel your kitchen, add a home office or replace the windows in your drawing-room. Whatever home renovations you’re looking to do, a private loan can help you in case you’re running short of money. If you don’t want to take out a secured loan, and if your home improvement plan is only small to mid-sized, then a private finance loan is a good idea. You don’t have to worry about putting anything up as collateral, and the funds will be credited directly into your bank account. This way, it’s relatively less risky.
3. Relocating to a New City
It’s very common to move to a different city for better job opportunities. However, if there’s anything that can stand between you and your dream job, it’s relocation expenses. Moving can be costly. You’ll have to pay for movers and packers, along with your own flight/train tickets. You also have to pay the security deposit for a new place, which can be very expensive. More often than not, you just don’t have this kind of cash on hand. This is where applying for a private loan can help you with quick loan approvals and disbursals.
4. Sudden Emergencies
There’s no telling when or where a sudden emergency may befall you—lost your phone? Need to undergo emergency treatment? Both these examples of sudden emergencies involve spending considerable amounts of money. If you don’t want to borrow from family or friends and simply don’t have that kind of money lying around, applying for a loan from a private loan app is your best bet. You don’t have to worry about paperwork, and the loan application process is straightforward.
If you’re looking for a private loan, KreditBee is a private loan app you can consider. Our entire loan application process is quick and completely online on the KreditBee mobile app, from profile creation to disbursal. You just need to download the app from Google Play, complete your profile, and relax. If you wish to learn more about our small personal loans, please write to us at [email protected].