There are times when we need instant cash but lack many options. We often borrow from friends and family or exhaust our savings to get through such a difficult period. However, you may now get personal loans from financial institutions and instant loan apps to help you get through the difficulty. Continue reading if you want to learn more about personal loans and their benefits.
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What are Personal Loans?
Dreams are meant to be fulfilled. The cost of buying a new phone, a new car, renovating your kitchen, or going on a summer vacation with your family are all small expenses that help enrich your life. However, if money becomes an impediment, we have to postpone or cancel such plans. This is when personal loans come into play.
Personal loans are short-term, collateral-free loans. Through cash loans, you receive funds for various purposes ranging from wedding expenses medical emergencies to college fees and more. You can repay the money in instalments within a specified period. Both the salaried class and the self-employed individuals can opt for easy loans provided they meet the eligibility criteria set by financial institutions.
What are the Features and Benefits of the Personal Loans?
Personal loans are easy to get due to the digital documentation process of the loan apps. Some of the other features are discussed below.
Collateral Free
Personal loans are an unsecured type of credit. It does not involve a borrower offering anything as security. Before giving a loan to qualified candidates, a potential lender considers many factors such as credit score, age, income, liabilities, and so on.
Minimum Documentation
The loans are extended to qualified candidates with minimum documents. The documents generally required are:
- Address proof
- Income proof
- Identity proof
Flexible Tenure
A borrower can repay the amount in EMIs over a certain period at the borrower’s convenience. Depending on the lender, the variable tenure spans from 12 to 60 months. Moreover, features like auto-debit and payment reminders services provided by instant loan apps help borrowers not to miss any instalment.
Multipurpose in Nature
Other types of loans are often intended for specific objectives, such as auto loans to purchase a vehicle or home loans to purchase a property. In contrast, a personal loan has no such restrictions and can be used for various things. The funds can be spent on anything the borrower desires, from new furniture to a new phone.
Quick Disbursal
After the required documents have been checked, the loan amount is disbursed immediately. However, it usually takes two to three working days to transfer the funds to the applicant’s bank account after verification.
Flexible Loan Amount
Personal loans are intended to secure funds for various purposes and can vary from Rs.10000 to Rs.50 lakh, depending on the lender.
Things to Know Before Applying For a Personal Loan
Personal loans are simple to obtain, and thanks to instant loan apps, cash is disbursed swiftly. However, before applying for a cash loan, an applicant must examine the following factors to prevent falling into debt.
Interest Rates
The personal loans are unsecured, so the rates charged are higher. Therefore, an applicant must compare between different lenders before applying.
Processing fees
The loan application is processed by a lender for a fee. It is a one-time fee and varies among lenders.
Pre-payment Penalty
A lender may penalize a borrower for early repayment of the loan. Therefore, before taking up an easy loan, a borrower should perform due diligence.
A personal loan is a reliable way to meet all unplanned expenses. It allows you to obtain the funds you need without depleting your savings. Whether it’s a medical emergency or a weekend getaway, a quick personal loan is a simple way to cover all your costs and live your life without worry.