Acquiring a personal loan has become an ideal solution nowadays for dealing with expected and unexpected expenses as it offers a host of benefits to the borrower. Whether it is the collateral-free nature, no end-use condition, or competitive interest rates offered by the lender, a personal loan contains a wide range of advantages that encourage the borrowers to avail it for acquiring substantial funds quickly without any hassle.
Scroll down to know more about the various benefits of taking a personal loan.
- Easy to apply and quick disbursement
With the onset of digitization in the financial sphere, obtaining a personal loan has become a cakewalk in modern times. One could easily apply for a personal loan online through the lender’s website with a few clicks. Upon successful submission of application and supporting documents, the financial institution performs a background check of the candidate for verification purposes. And if all goes well, the lender sanctions the loan without any hassle and the amount is disbursed in the borrower’s bank account within minutes of approval. Hence, a key benefit of acquiring a personal loan is that it comprises a paperless and contactless process that also facilitates the instant transfer of funds.
- Attractive interest rates
Another major benefit of opting for a personal loan is the affordable interest rates offered by the financial institutions to the borrower. While the rate of interest depends upon the candidate’s credit history, nature of employment, monthly salary, etc., one could negotiate with the lender for a lower interest rate based on an excellent financial profile. As the interest rate determines the EMI amount to be paid by the borrower which in turn adds up to the total repayment amount, bargaining with the lender to reduce the interest rates helps in minimizing the overall loan amount by a considerable margin.
- Flexible tenure
While a personal loan is usually offered with a repayment tenure of up to 5 years, the borrower can request for a shorter or longer tenure based on their EMI affordability, which can be computed using a personal loan interest calculator. Additionally, if a candidate wishes to close the personal loan before the fixed tenure, many financial institutions tend to charge a nominal fee or waive off the entire pre-payment fee depending upon their policies as well as association with the borrower.
- No collateral required
One of the most significant advantages of acquiring a personal loan is that it does not involve pledging security of any kind. The borrower is not required to submit or mortgage any valuable asset such as property or gold as collateral against the loan amount. In such cases, if the borrower is not able to repay the EMIs on time due to financial constraints, the lender does not hold any control over the borrower’s assets and cannot liquidate them to recover the loan amount. Hence, it is considered an ideal solution to ease your worries and achieve financial stability.
- No questions asked regarding usage
A crucial advantage of taking a personal loan is that it does not come with any end-use condition or obligation and could be allocated for any purpose whatsoever. Whether it is paying medical bills in case of a health emergency, funding your dream vacation, organizing a wedding, funding education expenses, starting or expanding your business, or remodeling your home, the borrower is at liberty to use the acquired funds for any use. However, one should avoid using the money for investment purposes as it may backfire in some cases and the loan could become a financial burden.
- Minimum eligibility parameters
While many loans have extensive eligibility criteria, one should fulfill an optimum eligibility requirement to avail a personal loan from a financial institution such as:
- The candidate should be an Indian citizen.
- The age of the candidate should be at least 21 years at the time of submitting the loan application and not be more than 65 years at the time of loan maturity.
- The candidate should be a salaried professional or a self-employed individual with a steady source of income.
- Availability of pre-approved loans
Lastly, one can also reap the benefit of obtaining a pre-approved personal loan from a financial institution if both parties have a long-standing association. Such loans are quickly processed with minimum documentation and the amount is straight away credited to the borrower’s account quite conveniently.