Personal loans over others

Personal loans are the one, which can be used for almost any purpose like weeding, health care, refurbishing or renovating your house, etc. you can also get these loans for consolidating your other expensive debts or loans.  Unlike the other loans that are car loans, home loans, gold loans, etc. you can take this loan without giving any security or collateral as it comes under the unsecured form of loans. As compared to other loans, the personal loan is a good idea, if you want quick cash as you can get your loan amount within few minutes but other types of loans take a lot of processing time. We will now discuss the pros and cons of a personal loan over other loans and hence you can get a better idea about the ways a personal loan can change your life:

1.    Personal loans are versatile: Unlike the other loans which are car loans, home loans, gold loans, etc. personal loans can be used in any way the borrower wants. It’s up to them whether they want to use the petty cash from the personal loans the way they want they can use it for weeding and during a medical emergency, vacation, or to cover up their old debts.

2.    It is an unsecured loan: As stated above already, personal loans do not require collateral or security to avail the loan.

3.    There are a variety of lenders: Other than just banks, other financial organisations like NBFC. SoFi and lending clubs to provide them with a personal loan.

4.    Credit score is flexible: Its not always necessary to have a decent credit score(i.e.>750) to avail of a personal loan. A borrower with a low credit score can also avail of this facility. 

5.    Monthly EMI’s are the same: Paying back a personal loan is always done in an organised manner, and the monthly emails remain the same. Lakshmi Vilas bank personal loan comes with feasible EMI option that suits the borrower’s needs. 

6.    You can borrow an amount up to 25 lakhs: This limit can be different for different lenders depending on the credentials of the borrower. 

7.  Quick loan approval: personal loan requires less documentation when compared with other loans. Sometimes the loan takes only 5 minutes of approval, and the amount of the loan is credited in your bank account just within the next 24 hrs.

8.    There are multiple ways for the repayment and the tenure of personal loan ranges from 1-7 years.

Now with a lot of good, there always comes something bad so, there are a few disadvantages of personal loans which shall be kept in mind by an individual before opting for a personal loan:

1.    A person might get bankrupt: when the amount of personal loan is not used wisely, and the repayment is not adequately scheduled, a person might get trapped in the debt cycle and can become bankrupt.

2.    High rate of interest: since it is an unsecured loan, the personal loan interest rates are quite high when compared to other types of loans, it shall also be noted that a person with a bad credit score might have to pay a rate of interest up to 35%

3.    Borrowers might be penalised for the delays and defaults in repayment: The lender will charge a fee on delays made by the borrower while paying the loan amount. One must consider the aforementioned points before applying for a personal loan. These points will help them in comprehending the peculiarities of personal loan and concluding on a  decision that will be the most appropriate for them. 

 Must Read-Various Categories of Personal Loan