What Makes Personal Loans More Popular Than All Other Loans?
Personal Loans are amongst the numerous types of loans, which can be borrowed from banks or other financial institutions. Personal Loans are multipurpose loans that can be used for consolidating previous debts, paying for an unexpected cost, funding a small home development project, going on a vacation, wedding, and so on.
Unique Features of Personal Loans, Which Make Them a Favorite Financing Option.
Easy and Quick to Avail
Personal Loan is usually offered by the majority of banks. This type of loan is easy to avail and comes with an affordable rate of interest. Numerous banks are offering online Personal Loans, making it easier and instant to apply for a Personal Loan. The process is completely online including the paperwork part. You can Apply for HDFC Personal Loan or Personal Loan from any other lender through online marketplaces or respective bank’s website in just a few seconds.
It means that while taking a Personal Loan, to use an asset as security is not required. If in case you fail to repay the loan amount, the lender will not procure and sell your property or any other asset to reimburse their loan. This is one of the major reasons why Personal Loan interest rates are higher than that of secured loans.
Availability of Flexible Loan Amount
You can get a loan amount of up to Rs. 50 Lakhs, depending on your needs, income, repayment capacity, age, CIBIL score and other eligibility factors. The better the credit score and higher the income, the more money can be borrowed.
These are one time loans, that means, until you have paid the loan amount in full, you cannot get other Personal Loan. Once the account is closed, you can reapply if you need to borrow again or you can opt for Personal Loan Top Up facility after servicing a few EMIs (as decided by the lender).
Personal Loans Come with a Fixed Rate of Interest
The rate of interest is fixed and cannot be changed till during the entire loan tenure. The rate of interest on Personal Loans is based on the borrower’s credit history and score, income, and loan amount. The more your credit score is, the lesser your loan’s rate of interest will be. The low rate of interest means smaller EMIs.
Personal Loans Have a Fixed Repayment Tenure
You get a fixed tenure to repay your Personal Loan. The loan tenures can be of 12, 24, 36, 48, and 60 and even 72 months (in some cases). Longer repayment period lowers your EMI too, but at the same time, you have to pay more interest for a longer tenure Personal Loan.
10 Golden Rules to Follow While Taking a Personal Loan
Personal Loans have constantly been the most popular financial product. Personal Loan is considered the best option to handle cash crunches. You can Get a Personal Loan for Home Renovation, higher education, marriage expenses and even in case of health-related emergencies to pay medical bills. Anyone can get the benefit of this loan for any purpose and no security or guarantee is required to be given against the loan. However, there are a few important things you must take care of when availing these loans, such as:
- Do not borrow more than required
- Make sure the repayment is done on a timely basis
- Try to maintain the tenure as short as possible
- Always avail insurance for large loan amounts
- Always look for the best option
- Understand the fine prints
- Don’t take a Personal Loan for investment purpose
- Prepay when and if possible
- Don’t avail another Personal Loan before closing the first one entirely
- Calculate EMI before going for a Personal Loan
Applying for a Personal Loan
With the availability of various online lending marketplaces, it has become much easier to get a Personal Loan. All you need to do is browse through multiple deals, choose the perfect one as per your requirements and overall charges, gather all the required documents, and apply online by filling up the application available on the website.