Financial ups and downs are a part of everyone’s life. Emerging from a financial crisis, however, could take some smart planning and research. There are several financial instruments available for this purpose. But you must choose the one that best suits your situation and requirements. Many people turn to a personal loan to pay off debts, ensure essential purchases are taken care of, or even keep a business running during a financial crisis. However, should you consider a top-up personal loan to help you get through the rough phase when you need money? The answer may not be straightforward, but we try to analyze and answer this question here.
What Is a Top Up Personal Loan?
During a financial crisis, a person may have incremental financial needs. Bills that keep piling up and past dues that need attention can together form a difficult web that you may feel trapped in. At such times, a bank or financial institution may provide a top-up personal loan over and above the money you have already borrowed. This top-up helps you clear your incremental dues so that you can get back on your feet.
Essentially, the bank or financial institution is willing to provide you with an additional line of credit if you have a good credit history. You can utilize this to deal with unforeseen emergencies and repay your debts according to your convenience.
Thus, an immediate need for a large sum of money can be taken care of, and the repayment can be broken down into several manageable parts.
Can a Top Up Personal Loan Be Helpful for You?
Taking a second loan may seem intimidating when you are already in debt, but many lending institutions have customer-friendly policies these days. These policies make borrowing and repayment much easier than before.
Short-term or emergency needs that come up unexpectedly can cause stress and derail a person’s plans. This can seem especially stressful when you have an existing loan. However, personal loan repayment options can be flexible. Attractive personal loan interest rates also make a top-up loan an accessible option in your time of need.
Since personal loans are unsecured, you will not be forced to provide collateral when taking a top-up. The bank or financial institution will also not delve too deep into the purpose of the loan. This can provide a great deal of flexibility in your time of need.
All you need is a good credit history and proven ability to repay the amount. These two factors will play a significant role in determining your personal loan eligibility.
Overcoming a Difficult Time
A top-up personal loan can be a good option when you urgently need a large sum of money but cannot arrange it yourself. Though a second loan may attract a slightly higher personal loan interest rate, you can borrow it for a short period and repay the amount as soon as your situation improves. The unsecured nature of personal loans and flexibility provided in repayment makes them an ideal instrument to be used during a financial crisis.
It is advisable to check a personal loan EMI calculator to determine your monthly payment and then decide. However, make sure you conduct some research of your own to determine the best course of action for yourself. Though a financial crisis poses a big challenge, it doesn’t have to completely derail your life’s plans. You can avail of a top-up loan to help you come out of such a difficult situation more easily.