You cannot say that emergencies will never come your way. A crisis is something that happens which you have no plan about it. It can be a need for instant medical care, car repair, or even buying basic needs in the middle of the month.
In most cases, it’s very challenging to cover an emergency if you have no savings. And that’s the reason you may have to get a personal loan that will help you. Often, people take personal loans to cover emergencies.
But before we know whether taking a personal loan is a good idea to solve an emergency, let’s first understand its meaning.
What is a personal loan?
A personal loan is a loan that you can take to cater to your individual needs. For instance, you can use a personal loan to repair your car, renovate your house, do debt reconciliation, or cover medical emergencies.
The increased rate of unemployment translates to more reasons for taking personal loans. Whether working or not, you have to feed, get shelter, and medical care. And personal loans come to fit well in such situations.
Now that you know the meaning, let’s jump right to why personal loans are good when it comes to emergencies.
What makes personal loans fit for emergency needs?
1. Easy to acquire
It’s usually easy to apply and get a personal loan, whether in a traditional bank or online. Currently, most personal loan lenders such as Viva Payday Loans have is ruling the internet, so it’s now more accessible than before to get quick funding.
In addition, the application process is usually easy because you can do it in the comfort of your home. Then get the money to your account within a few hours. And that is the number one reason why personal loans could be a good choice when looking for an emergency loan.
Furthermore, there is not much documentation needed while applying for a personal loan. All you need to do is to prove that you have a continuous income flow.
2. No need for collateral
When applying for a personal loan, you don’t have to provide collateral for the lender to approve your loan. Most personal loans are not secured, meaning that you will not give the lender your land title deed, home documents, or even a vehicle logbook.
Therefore, there won’t be much time to lose when confirming that the documents are real or fake. The lender will depend much on your paycheck or any other source of income that they may accept.
In addition, if you default on the loan, the lender will not have any right to take any of your belongings. But that should not excite you because you may hurt your credit score once you default.
Read next: Reasons Why Getting a Loan Can Help You
3. There is no fixed use
Once the lender approves your loan, they don’t tie you to use the loan for a single purpose. Instead, they deposit the money in your checking account for you to use for any purpose.
That means that you will have the authority over the money. Therefore, you should ensure that you spend it wisely or you benefit fully from the lending.
4. There are no payment strains
In most cases, payday loan lenders deduct the repayment directly from your account on the agreed dates. In addition, that means it will be impossible to skip payments because some lenders will notify you when the date approaches.
Furthermore, the loans are usually of small amount in nature. So it will be easy and faster to repay the loan. The lender may also give you an option to repay in small installments
In return, that helps you to maintain a clean name on the Credit Bureaus.
My take
Always ensure that you take a personal loan only for emergencies. Do not take a personal loan to cater for things that are not emergencies. Also, ensure that you manage your debt wisely before you get yourself in a debt cycle.
