Are you also tired of getting unbearable calls asking whether you need a personal loan or not?
Many top banks and fintechs follow such intrusive practices to sell their offerings. Without hesitation, most of us think of this as spam, scam, or over-selling tactics that just don’t sit right with us as customers.
If you think this is a big problem, then wait—there's more...
When you're caught in a real-life emergency—be it a medical urgency, a family function, or even a leisure holiday—you may suddenly find yourself scrambling for funds.
That’s when personal loans become a go-to option. But guess what? The same bank or NBFC that was calling you non-stop a month ago is now offering the loan at double the interest rate, or with terms that feel extremely harsh.
Yes, personal loans can get very expensive—and it hurts most when you actually need them.
It's not that tricky to pick up the right personal loan offer
But hey, it’s not all bad.
If you stay a little vigilant and pay attention to a few critical details, you can still get a fair deal on a personal loan:
- Watch out for processing fees and hidden charges.
- Understand the actual loan amount you’ll get—lenders often approve only 80–90% of the requested amount.
- Carefully read the loan tenure, EMI amount, and repayment schedule.
- For mobile loan apps, be aware that they may request access to your phone contacts, messages, and location—which, in bad scenarios, can be misused for harassment during loan recovery.
Why do banks and NBFCs follow these unsolicited practices?
Simple. Personal loans are unsecured, which means there’s no collateral.
This makes them high-risk for lenders—but also high-profit.
Interest rates typically range from 10% to 28% per annum, sometimes even higher for short-tenure loans or loans to individuals with low credit scores.
So, banks and NBFCs push these loans aggressively to increase their margins.
And when customers default or delay repayments, some lenders use extreme and unethical recovery tactics to get their money back—because their risk isn’t backed by any security.
But When Should You Take a Personal Loan?
Since personal loans are unsecured, they don’t require any collateral and are usually fast, paperless, and instant in many cases.
That’s why they can be extremely helpful in the following scenarios:
✅ Medical Emergency
When there’s a sudden medical need and you don’t have health insurance—or your insurance doesn’t cover cashless hospitalization—you may need urgent capital to start treatment.
A personal loan can provide quick access to funds, often within hours, to help save lives and reduce stress.
🏠 Home Renovation
Need to renovate your home but running low on funds?
Personal loans can help you upgrade your living space, which not only provides emotional satisfaction but can also increase your property’s value over time.
💍 Family Functions like Weddings
Indian weddings and celebrations can be lavish and expensive.
If you want to host the event of your dreams but lack immediate funds, a personal loan can help you manage big-ticket expenses and repay in easy monthly EMIs.
✈️ Travel and Leisure
Dreaming of a vacation abroad or a relaxing getaway?
Travel can be costly, but a small personal loan can help you cover the cost and let you enjoy your trip without financial strain.
📈 For Boosting Credit Score
Yes, you heard that right—taking a small personal loan and repaying it on time can actually help improve your credit score.
Timely EMI payments reflect responsible credit behavior, which is monitored by credit bureaus like CIBIL.
If you're new to credit or have a low score, this can be a smart move to build a stronger financial profile and secure better interest rates on bigger loans in the future.
Conclusion: Choose Smartly, Not Desperately
A personal loan doesn’t have to be overwhelmingly expensive—if you follow a few smart practices.
Always compare interest rates online or check with your existing bank, where you might get a loan at a reasonable 10–15% interest rate.
Avoid falling prey to unsolicited calls or digital loan apps that lure you into taking loans at sky-high rates of 30–40%.
Being financially informed is the first step to making personal loans work for you, not against you.
📢 Stay Tuned for More!
Enjoyed this blog? Stay tuned for more such expert tips and actionable strategies to simplify your financial journey and keep your inbox (and phone) spam-free!
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