Is taking a personal loan for Down Payment a good idea?

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Is taking a personal loan for Down Payment a good idea?

Personal loans are advantageous financing options that you can use to finance various expenses. You can avail of a personal loan for down payments. Ev

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Personal loans are advantageous financing options that you can use to finance various expenses. You can avail of a personal loan for down payments. Even when you plan to purchase a house through a loan, you still need to make the down payment from your pocket. Your home loan wouldn’t fund the entire purchase amount. You need to support some percentage of the purchase from your pocket.

If you don’t plan well, then you might not have enough funds for the down payment. Or, you may have used the funds to take care of some other financial emergency. An instant personal loan can come to your rescue and help you in purchasing the house without burning a hole in your pocket.

Advantages of Taking A Personal Loan for Down payment

  • Easy approval and quick disbursal

You can get approval on your personal loan quickly with the pre-approved loan offer and get the desired fund within 24 hours. It is super easy to avail a personal loan and get fast approval which ensures that you can make the purchase immediately with no hassle.

  • Repayment in easy EMIs with an instant personal loan

Numerous lenders can offer you a personal loan at competitive interest rates. Usually, the interest rate on a personal loan can be anywhere between 10% and 30%. However, if you have an excellent CIBIL score, you can avail it at a lower interest rate. The EMIs for a personal loan is flexible, and you can choose a loan tenure that is the most suitable for you. The repayment options are quite convenient and do not disrupt your monthly budget.

  • Easy-to-meet eligibility criteria

A personal loan is an unsecured credit. So, you do not need collateral to borrow a personal loan. Therefore, the eligibility criteria are easy to meet.

  • Personal Loans Documents

A personal loan requires minimal documentation. You can check the lender’s website to know more about it.

  • Minimal fees and charges

Apart from the interest rate, additional charges such as processing fees and foreclosure charges are minimum. Thus, a personal loan is quite affordable for covering up the down payment.

  • Personal Loan Taken for Down Payment Can Save Tax

One of the best advantages of a personal loan for a home loan down payment is that you can enjoy tax benefits while using a personal loan for a home loan down payment. Like a home loan, you can claim up to Rs. 2 lakhs on the total interest you paid against a personal loan. 

  • Save Your Emergency Fund

If you get a personal loan for the down payment, you can keep your emergency fund for better uses. You can use such funds for medical emergencies, sudden travel, etc. If you use up your entire savings for a home loan down payment, then you will not have any left savings left, which can be risky.

However, if you are planning to avail a personal loan for a home down payment, then, you must calculate your loan EMIs using an personal loan EMI calculator before applying for it. It would give you a precise estimation of the total outflow of EMIs and help you manage your monthly budget accordingly. And make sure that both the EMIs together is not more than 40% of your net income. If it exceeds that, you may have to make sacrifices in daily needs, which are never appropriate. 

Conclusion:

Personal loans are multipurpose loans with no restrictions on their usage. A home loan downpayment is the best way to make use of a personal loan. You can enjoy several benefits while availing a personal loan for the down payment. It would be best if you are careful about the regular payment of EMIs. If you are disciplined in your personal loan repayment, you can enjoy the best of it.

 

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