A personal loan is a loan that can be easily availed of based on your credit history and income. Personal loans are also called unsecured loans because no collateral is required to avail it. Instead, lenders check your credit history to approve the application of personal loans.
The best part is that you are not required to visit your lender in person to avail of a loan. Personal loans are relatively easy to apply and avail of as compared to home loans and auto loans. That makes them useful for various purposes. From small home renovation to expensive purchases, you can use the funds for almost anything, but it’s advisable to borrow only as much as you require and for things that improve your finances. You can apply for a loan here:
With so many different forms of credit, it can be challenging to settle for one. Here’s a detailed list of 5 reasons that show how a personal loan is different from other loans and more beneficial to the borrowers.
5 Reasons Why Personal Loans Are Different From Other Loans:
- No Collateral And Higher Loan Amount:
A personal loan is an ‘unsecured loan,’ which means that you do not need to offer any security to the lender in cash, shares, or other assets. It might make it a more viable option than other credit forms, which require collateral as some borrowers cannot raise the cash required as collateral. With numerous lenders in the market offering a personal loan, it has become quite convenient for the borrowers to find a lender that provides the required loan amount at an affordable interest rate. Generally, lenders offer personal loans of the amount as low as Rs. 10,000 to as high as Rs. 40 lakhs.
- Minimal Documentation And Quick Disbursal:
The entire process of a personal loan application, both online and offline, is quite simple and easy. No tedious documentation is required. Key documents that lenders usually need include proof of identity, proof of address, and income proof. Unlike other credit forms, personal loan disbursals are superfast and sometimes happen within a few hours once the application is approved. The personal loan amount that gets disbursed is based on the borrower’s repayment history, age, profession, monthly income, employer reputation, and other such factors.
- Fixed Payoff schedule:
Paying on time is a vital part of being financially stable. If you don’t, it will negatively influence your CIBIL score. A personal loan has a fixed payback schedule. So, you can pay a specific amount on a particular day within each month or specified intervals. And you don’t need to worry about whether or not your payments will be prolonged over a period of time. So, when you avail of a personal loan, you know your fixed payback schedule.
- Flexible Usage:
Personal loans are multipurpose. Unlike other loans, it can be utilized for various purposes, such as meeting expenses of a wedding, medical emergency, business emergency, travel, house renovation, debt consolidation, etc. The flexible usage of the loan amount makes it one of the best options, among other credit forms.
- Automated and flexible repayments:
In case you don’t want to write a check every month or make a manual deposit to repay your loan. You can use the facility of automated payments that several lenders offer. It can be extremely beneficial for those individuals who have a hectic schedule. So, there’s no need to stress over missing a payment and negatively affecting your credit history. Also, you can calculate the EMIs to be paid each month using a personal loan calculator online.
Your financial requirements do not always appear when you are expecting them. You may need funds at a time when you are least ready for it. So, in such situations, you may require personal loans that can quickly meet immediate funds and all the money requirements. It is quite convenient to apply for a personal loan online from the comfort of your house. It is designed as a fast solution to all your financial emergencies.