A financial crisis can strike anyone irrespective of their financial standing. Personal loans are a very effective way of handling any such temporary financial situation. These loans are usually taken from a bank or a Non-banking financial company(nbfc). As the name suggests, a personal loan can be used for any purpose be it business, commercial purpose or any private reasons. A personal loan can also be used to clear off earlier debts. A personal loan is a type of unsecure loan that can be availed by an individual. Personal loans have a quick approval mechanism with loans getting cleared in almost 1 or 2 days. A customer can use the features available online to calculate the EMI before applying to assess the repayment of the loan throughout the tenure.
It is an unsecure loan it does not require any type of security or collateral and you can use the funds provided by the financial institution in any way you want to. A personal loan can be used for any personal reason. Personal loans are basically short term or medium termed loans, the tenure of a personal loan is shorter compared to a mortgage loan. Mortgage loans have tenure of almost 10-20 years, whereas a personal loan will have tenure between 1 to 5 years.
3 reasons why it’s beneficial to opt for a personal loan:
1. Easily available:
A personal loan is a loan product that is easily available at different financial institutions and non-banking financial companies (NBFCs). Personal loans are easily available at affordable interest rates making them the most viable options for the customers.
2. Less documentation:
Getting a personal loan approval does not require any type of asset verification, it just involves minimal documentation making the process easy for the customers.
3. Quick loan approval:
Getting a personal loan has become very easy these days, an individual can easily opt for a personal loan online and get the loan amount disbursed in their account within 1 or 2 days.
Benefits of a personal loan are:
1. Utilizing the loans:
Unlike other loans, a personal loan can be used freely for any purpose the customer wants. These loans can be used for getting your home renovated, planning a marriage or any other financial situation the customer wants to handle.
2. No collateral required:
Personal loans are approved on the basis of the income details or the financial history of a borrower. Since these loans do not require any fixed asset or collateral, they are easy to use for any vast majority of people
3. Flexible loan amount: Based on the borrower’s financial history, and depending on the NBFC or bank from where the loan has been taken
4. Adjustable tenure: The tenure of a personal loan can be between 12 months to 60 months, depending the repayment plan decided by the customer.
Author bio: Mihir Yande, a financial advisor by profession, has written about personal loans. Through his research, he explains the 3 reasons why its beneficial to opt for a personal loan.