Personal Loan: Avail when Actually Needed! Personal loan! Sounds Incredible! This is one of the kinds of loans which do not require you to give an explanation to anyone, including the financial institution from where you are borrowing money. Really? Does it happen? We are brought up in an era where before going on a leave we need to apply for it systematically, where seeking advice is necessary before buying a gadget, where opening a bank account requires you variety of proofs; amidst of these compulsions when we hear we do not need the reason to get approved before getting the personal loan, we really find it incredible. Minimal documentation, no security, flexibility, quick approval, fast disbursal are a few attributes of personal loan which defines it aptly in every sense. Certainly, credit card is a smart substitute to fulfilling these expenses, but in comparison to personal loan it costs relatively high. When weighing the personal loan, credit card scores have been taken into consideration. But before you believe that it is the best remedy for your needs, you need to stop over here and reconsider the need and relative solution. Everything has its pros and cons and the same goes for personal loan too. If experts are to be believed, a personal loan is certainly the best remedy for few solutions, but it is not suitable for everyone. If there occur some unexpected expenses, then a personal loan can certainly be considered but before that weigh its advantages and disadvantages as well. Advantages! a. Flexibility in use - This is the first and foremost reason why it has been preferred over other kinds of loans that it does not require a specific purpose. One can take it for vacation, treatment and even for wedding. Reason is certainly not a problem here. b. Less Documentation - Even for opening a bank account, one needs to have ample of proofs for supporting the factor that you belong to this planet. And here personal loan wins, which requires minimal documentation. When applying for personal loan, people need to submit a few documents only. c.
No Security - Like in many kinds of loans, one need to provide security in different forms. Here, having an asset becomes the necessity and if you do not have any, then you do not even qualify to apply for the loan. But in personal loan, there is no such obligation.
d. Quick Funding - In comparison to any other loan, personal loan gets sanctioned in no time. For any other loan, one need to wait to go through various steps and maybe you will be called several times by the borrower in order to clarify many things. It surely indicates that your no urgent requirement will be addressed immediately. Here, personal loan wins, which get approved in a matter of two or three days. Also, after verification, the sanctioned amount gets transferred to the account which is another favorite feature of personal loan. Disadvantages! a. Rate of Interest - Definitely things are at fingertips in personal loan, but one must not forget the rate of interest at which they are getting money. This is the most important aspect of personal loan wherein borrower usually keeps high rate of interest and later on it becomes problematic for the lender while returning. b. Credit score - Certainly, it has some criteria for sanctioning the loan. Credit score matters a lot when banks grant personal loan. Your past records will matter a lot in getting the things done. It will also include things such as age, income, profession and more. c. Tenure - Personal loan has some restriction over granting the amount. The tenure has been decided by the bank and the lender cannot stretch to the period of time he wants. This is another concern which should be taken into account before entering into any deal.