During a financial crisis, personal loans are a lifesaver. A personal loan is an ideal tool to deal with financial difficulties or milestones in your life, whether it’s a medical emergency or a wedding. Today, an increasing number of people are seeking such loans, resulting in a constant year-on-year increase in demand for them.
So, what makes personal loans an appealing credit choice, let’s dive in to figure out.
What is a personal loan?
An unsecured loan that a bank or a non-banking financial company (NBFC) gives to an individual to cover various personal requirements is called a personal loan.
Characteristics of a personal loan that make it an appealing credit option:
1. Loan Amount
Personal loans of up to INR 25 lakhs can be availed from lenders. If you fit the eligibility criteria, you can quickly obtain a personal loan of up to INR 25 lakhs to take care of your immediate and long-term financial needs.
2. The Flexibility
The flexibility of a personal loan is a huge benefit. Unlike a car or housing loan, this financial resource is limitless and can be utilized for any need. In other words, you can use the money you borrow to pay for a wedding, travel, education, medical expenditures, jewelry, electrical devices, and other things. Therefore, it’s a simple solution for you to get out of the immediate financial bind you’re in.
3. Fast Disbursement
When it comes to getting approval for an instant personal loan, meeting the qualifying conditions is crucial. A good credit score is a significant advantage. The time it takes for a bank or lender to disburse funds varies, but it’s usually within 24 hours or 72 hours. In an emergency, this makes it your best option. If you are already a customer of the lender, you might be eligible for quick online approval.
4. Fewer Documents
A personal loan requires only a small number of documents to get approved. This allows it to be processed more quickly. You will be requested to upload scanned documents for verification subject to online approval. After this, you will be given the loan in minutes. This makes it a truly painless process, and you may be able to get out of your financial trouble sooner than you think.
5. Minimal Paperwork
The paperwork required to be completed to avail of a personal loan is minimal. This contributes to the procedure’s speed. However, if you have any queries, do not hesitate to get in touch with the customer service department. They may even send a representative to your area to assist you with the paperwork.
6. No Collateral Required
There is no requirement for any collateral for taking out a personal loan. This is a significant advantage if you have no assets. Moreover, a personal loan is considered the most effective means of obtaining urgent financial aid because it is unsecured. Once you’ve figured out the first few steps, you’re ready to start!
7. Pocket-Friendly Payback
You have several options for repaying your loan, including auto-debit EMIs, post-dated checks, online payments, etc. Flexible tenures are common, and you can pick the one that best matches your needs. The EMI decreases as the term lengthens, and vice versa.
8. Affordable Interest Rates
Personal loans have low-interest rates, making them accessible to everyone. This ensures that your EMI remains constant during the term of your loan. As a result, there’s no need to be concerned about the ever-changing interest rates associated with other sorts of loans.
9. Tax Advantages
Another benefit of a personal loan is the tax deduction that you may claim if you use it to pay for anything like home renovations or buildings. Section 24B allows for a benefit sum of Rs 2 lakh. However, you must offer sufficient paperwork to demonstrate the use of funds for the aforementioned purpose.
Consider the following points before taking a personal loan:
Various lenders now provide personal loan deals with appealing terms and conditions. However, before taking out a personal loan, conduct thorough research.
Prior to making a final decision, consider numerous factors such as interest rates, processing costs, repayment flexibility, pre-payment charges, etc. This can assist you in selecting a loan that best meets your requirements.
When applying for a personal loan ensure that you have a strong credit history. This will boost the likelihood of the lender approving your loan. Furthermore, having a good credit score can help you get a bigger loan with a lower interest rate.
You must calculate your EMI for a personal loan ahead of time. It will assist you in better planning your monthly budget. To lower your payment load, make sure you get a loan with a low EMI.