- A personal loan is always a great option when the borrower needs extra cash and there are various benefits of personal loans.
- The Borrower may use it for various purposes
- Finance the home improvement project
- A child’s education
- For an overseas trip
- A medical bill, etc.
Advantages of Personal Loan
- One of the biggest advantages is that the borrower can get a personal loan quickly.
- Another advantage is that he needs to provide fewer documents.
- The process of getting a personal loan is thus considered to be hassle-free.
- Personal loans are also a good fallback option if the borrower needs cash urgently when his bank balance is low. But before he applies for a personal loan, then here are a few points to consider:
- The borrower can get approval for a personal loan in as little as 24 hours. He simply needs to have all his information in place.
- Lenders thus offer anywhere between INR 1 lakh and INR 15 lakh. Besides, the lender also sends the money to the borrower’s account. In fact, he could even use a personal loan when he is traveling abroad.
Flexible repayment options
- If a borrower gets a bonus or an increment, then he might want to use this extra money to repay the personal loans.
- However, the borrower may need to pay a penalty in the case of part payment within less than six months of the loan disbursal.
- Prepayments also become free of charge after this period. If he makes repayment of the personal loan within a year, then he can pay at most 25% of the principal amount.
Flexible modes of payment
Making the payments on the loan is easy enough. He can either pay online or through an auto-debit instruction. The borrower can even issue post-dated cheques.
Upon applying for a personal loan, the lender would charge the borrower a non-refundable processing fee. The amount would thus vary depending on the particulars of the
- Unlike a home loan or a car loan, a personal loan is generally considered as unsecured. In other words, he does not need to provide any kind of collateral.
- As they are unsecured loans, the rate of interest thus tends to be a bit high.
- The personal loans can thus be a good back-up when the borrower faces a cash crunch. But he should not use it indiscriminately.
- He must get a personal loan only to meet unavoidable expenses or as an investment in the future.