In today’s rapidly evolving economy, financial stability faces many challenges. Medical emergencies, sudden travel, unexpected costs and house renovations can easily disrupt even the most robust financial plans.

Meanwhile, household savings are rapidly declining. Borrowers are increasingly taking on new loans and credit just to meet day-to-day expenses. Therefore, it is crucial for borrowers to use credit wisely to avoid long-term financial stress.

Vibhore Goyal, Founder, OneBanc, says, “Unplanned expenses are shocks outside salary cycles. Medical bills or breakdowns deserve buffers and borrowing as a safety valve. Yet buffers are shrinking — household financial savings have slipped from 15% to 10% of GDP (RBI, NSO), and one-third of urban India has under a month of reserves. The sequence is simple: first secure your emergencies, then upgrade your life. And always choose RBI-regulated lenders so financial help never turns into financial harm.”

Now, before going ahead with any particular personal loan product, it is important for aspiring borrowers to understand the risks associated with personal loans. Some of the risks of personal loans are briefly discussed below:

In conclusion, with household financial savings consistently declining, sensible and well-planned borrowing is crucial. Aspiring borrowers should carefully consider the risks of personal loans. They must plan their financial futures judiciously, ideally with certified financial advisors, to avoid complications later on.

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