A personal loan can be your greatest ally when you urgently need funds. It can help you meet a medical emergency, a dream vacation, or any other goal you may have set in your mind. You can get it easily on a loan app by filling in all the details and attaching all the documents that are needed to verify your data.
Personal loan apps allow you to apply for a loan from anywhere, at any time-but first, take time to know more about this credit facility.
Understanding Personal Loans
Before getting to know how a personal loan can help you, first understand what a personal loan is. It is an unsecured borrowing option offered by financial institutions towards personal expenditure. The loans come without any collateral requirement. That means there’s no risk of losing any asset-such as property, gold, etc. The interest rates are either fixed or floating with flexible repayment tenures.
Why Personal Loans?
You can use a personal loan for a variety of purposes. From home renovations to education expenses, you can finance it all as most personal loans have no end-use restriction. You can easily apply for personal loan through a financial company’s loan app or website and enjoy an array of benefits like:
- Easy Application Process
Completing an application on personal loan apps is effortless. All it takes is simple steps and you are done in just a few minutes.
- Competitive Interest Rates
The interest rates on this loan is much lower than those that apply to credit card unpaid balances or loans. Usually, personal loan interest rates range from 9.99% p.a. to 44% p.a. However, it depends on the loan amount, credit score, and repayment period.
- Quick Access To Funds
Personal loans can be issued fast – within the same day or 1-2 days – making them a good option for you if you have urgent financial requirements. Personal loans can be used for various purposes, like upgrading your electronics or consolidating debt.
- Flexible Timelines
A personal loan’s maximum term is normally 60 months or five years. Nevertheless, some lenders can increase this period to seven years (84 months) or even more. You can choose the right duration to pay back the loan with the interest so you don’t feel the strain or any stress. In fact, paying on time will also help you increase your creditworthiness.
- No Collateral
For many borrowers, this can be an advantage because these loans are unsecured. So, you don’t need to compromise your assets to get access to cash.
- Fixed Interest Rates
Most personal loans have fixed interest rates, which allows you to plan your finances better as it keeps your EMIs and tenure constant.
How A Personal Loan Can Help You?
You may use the money you get from this loan for a variety of purposes, from setting up a freelance gig to helping a family member in need. There are no restrictions in using these funds. Take a look at some things you can check off your list with this loan:
- Travelling To A Foreign Destination
If you are planning on going on your dream holiday, then it’s not an unusual thing to take a personal loan. A large number of people travel to foreign countries every year by availing a personal loan. This helps with flight tickets, room booking, car rental, dining, and more.
- Organising The Big Fat Wedding
A wedding is a once in a lifetime event and also comes with huge upfront costs. Assuming you have a wedding budget of ₹35 lakhs but fall short by ₹5 lakhs, a personal loan can be your best buddy. Instead of asking someone to pay the additional amount, you can quickly avail a personal loan through a loan app.
- Buying A Luxury Item
You may want to purchase an expensive gadget or gold jewellery, and say that you are ₹1 lakh short. In these situations, a personal loan can be a feasible choice.
- Medical Needs
Whether planned or sudden, medical treatment can be very costly. Even if you have medical insurance, it may not cover every bill. This is when you may apply for a personal loan. The funds are usually disbursed swiftly, and provides an alternative to depleting your savings.
- Home Renovation
Often, the actual cost of renovating your house exceeds the budget you set. This does not mean that you must delay home improvement projects due to a lack of funds. With a personal loan, you can get the money you need to repair or renovate your house.
Factors To Consider
A personal loan only makes sense when you get pocket-friendly terms that help you repay easily. Planning your repayment is key to the experience so that you can avoid any stress in the future. Some things to check when planning this loan include the interest rates you get, the processing fees you are asked to pay and the repayment tenures you get.
Keeping an eye on your credit score is vital:
- Your creditworthiness determines key aspects of the loan offer you get
- Financial companies use your credit score to assess your eligibility
- The score helps determine the loan amount and interest rates
- If you are creditworthy, you get a lower, more competitive rate and vice versa
Read also: Making Your Dream Car a Reality: The Vital Role of Car Finance
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