The festive season is here, and with Diwali around the corner, everyone’s shopping lists are growing longer — from new clothes and gifts to home makeovers and gold purchases.
If your savings seem short, you might be considering a personal loan to fund your Diwali shopping. While it sounds convenient, is it really a smart move?
Let’s break down the pros, cons, and better alternatives before you borrow.
Why People Take Personal Loans During Diwali
During festive seasons, expenses rise — but so do attractive offers. Many banks and NBFCs promote “Festive Personal Loan Offers” with:
Lower interest rates (starting around 10.5% p.a.)
Quick disbursal through digital apps
Zero processing fee or cashback offers
The idea of quick cash can be tempting — but it’s crucial to understand both sides.
Pros of Taking a Personal Loan for Diwali Shopping
✅ Instant Access to Funds:
Most lenders approve loans within 24–48 hours, helping you make timely purchases.
✅ No Collateral Required:
Personal loans are unsecured — meaning you don’t need to pledge assets like gold or property.
✅ Flexible Repayment Options:
You can repay in EMIs over 12–60 months, depending on your comfort.
✅ Boosts Credit History (If Repaid on Time):
Timely EMI payments improve your credit score and future loan eligibility.
Cons of Taking a Personal Loan for Diwali Shopping
❌ High-Interest Burden:
Even with festive discounts, interest rates remain higher than secured loans — typically 10–18% p.a.
❌ Short-Term Spending, Long-Term Debt:
You might still be repaying your Diwali purchases months (or years) after the lights go out.
❌ Hidden Charges:
Processing fees, prepayment penalties, or late payment charges can increase total costs.
❌ Impact on Credit Score (If Missed EMIs):
Delayed or missed EMIs can hurt your CIBIL score, affecting future loan approvals.
⚠️ Tip: If you can’t repay the full amount comfortably within 6–12 months, reconsider taking a loan just for shopping.*
Better Alternatives to a Personal Loan
💡 1. Credit Card EMI Plans:
Convert large purchases into 3–6 month EMIs — often at lower or zero interest.
💡 2. Buy Now, Pay Later (BNPL) Offers:
Platforms like Amazon Pay Later or LazyPay offer short-term credit with flexible repayment.
💡 3. Gold Loan (for Larger Purchases):
If you have gold, a gold loan offers lower interest (~8–10%) and quick approval.
💡 4. Festive Discounts & Cashback Schemes:
Use bank tie-ups, exchange offers, and UPI cashbacks to reduce out-of-pocket costs.
💡 5. Budgeted Savings:
Plan ahead by setting aside a monthly festive fund — it’s the safest and most stress-free way to shop.
When Taking a Personal Loan Makes Sense
You may consider a festive loan if:
You have a stable income and can easily handle the EMIs.
You’re using it for essential purchases or upgrades (not impulse shopping).
You’re getting special festive interest rates or 0% processing fees.
In such cases, it can be a useful financial tool — if managed responsibly.
FAQs
Q1. Is it good to take a personal loan for Diwali shopping?
Only if you can comfortably repay it within a few months. For luxury or impulse buys, it’s better to avoid debt.
Q2. What is the interest rate for Diwali personal loans?
Most festive personal loans start from 10–13% p.a., depending on your credit score and lender.
Q3. Will a small loan affect my credit score?
Yes — positively if repaid on time, but negatively if you miss EMIs.
Q4. What’s the best alternative to a personal loan?
Credit card EMIs or BNPL offers for short-term needs; gold or top-up loans for larger expenses.
Conclusion
Diwali should be about light, joy, and prosperity — not long-term debt. While personal loans can help in emergencies or planned big-ticket purchases, borrowing just to shop often leads to unnecessary financial pressure.
Celebrate smartly: spend within your means, explore safer credit options, and let your Diwali truly shine — debt-free. ✨💰
Published on : 18th October
Published by : SMITA
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