How to Plan Your Retirement by Taking a Personal Loan?

Are you looking for ways to spend a secured and independent post-retirement life? But are you worried about facing some family emergency in the future after you retire? If the answer is yes, then the best solution to ensure a carefree post-retirement life is by obtaining a personal loan.

In recent times, financial corporations in India have evolved to a great extent. Along with allowing a flexible repayment period and an affordable rate of interest, the financial institutes and NBFCs have also introduced personal loans for pension holders and other retired individuals. In case of an emergency need, a retired person can apply for a personal loan online and get the loan amount disbursed in less than 24 hours. The lenders allow you to apply for a personal loan against an existing National Saving Certificate, fixed deposit (FD), gratuity, pension, and other instruments. Let’s look at a few relevant points that a retiring individual should know before applying for a personal loan:

  • Prefer need over eligibility:

If you have sustained a substantial number of years in a renowned organisation and have a cordial relationship with a specific financial institution, you might be eligible for borrowing an amount of money much more than what you need. However, after opting for a loan on eligibility basis, you might incur unnecessary expenditures and bear a hefty interest post spending the money on your emergency needs. Therefore, it becomes crucial to analyze the exact amount of money needed to avoid such unnecessary expenditures and interest payments.

  • Reviewing your credit report:

Your loan application won’t just get approved once you apply for it. Every lender has different eligibility criteria and requirements. Besides, they will also review your credibility when applying for the loan by using a personal loan eligibility calculator. Therefore, it becomes crucial for you to maintain a good credit profile to obtain a personal loan with ease. A higher credit score might also lead to a personal loan with lower interest rates and its approval.

  • Exploring different alternatives:

After determining the required amount of personal loan and credit report, it’s time for you to assess all the personal loan rates offered by different lenders. While comparing different rates, you should remember two factors- the repayment period and miscellaneous charges. Furthermore, there are several options against which you can apply for a personal loan in India. For instance, you can also take a personal loan against an existing home loan. Subsequently, this option will avail you with some tax benefits and lesser interest charges.

  • Keep all your documents ready:

After selecting a personal loan scheme, you should gather all relevant details regarding identity proof, permanent address, sources of income, Income Tax returns, salary slips, any other existing loans taken for acquiring assets, etc. It’s always advisable to keep all these documents ready and submit them as soon as the officials ask for them. Eventually, this will avoid slowing the documentation process, and you will be able to get the approval desired loan amount in a quick period.

Conclusion

A personal loan is the most effective and efficient form of borrowing, especially when you have exhausted all the other financing options. A fantastic aspect of a personal loan is that you don’t have to specify any particular reason for availing it. You can use it for multiple purposes after retiring like funding a family trip, starting a new venture, financing a child’s education expenses, and so on. Therefore, make sure you consider the points mentioned above to make the most of your life after retirement.