A personal loan is always the best answer for one who has a financial problem. Ease of application, quick approval, and limitless use make it the best option for many. Whether you need for a vacation, for your home payment, cover wedding expenses, or need money for home improvement, an urgent personal loan can help you out.
A personal loan can be a short or medium term unsecured loan, which does not require any collateral/security for disbursal. The loan is generally dispersed in a few hours to a few days with minimal or no paperwork at all.
Features of personal loan
1. No Collateral Loans:
As it is also called unsecured loans, personal loans do not require any collateral during application. However, banks and NBFCs take into consideration certain factors to determine your loan eligibility. These are:
Your Source of Income (salaried or self-employed)
Your Credit Score,
Your Age, and
Place of Residence
It is possible to opt for a higher amount of loan by co-applying with your relatives as long as (s)he has a good credit history. This raises your income bracket.
2. Quick Disbursal with Minimal Paperwork:
Unlike secured loans such as a house or a car loan, the documentation requirement of a personal loan is far less. If you have all the basic documents such as your identity, address proof, income proof, etc., the loan approval process can take as little as 48 hours.
Most lenders will ask you to apply for personal loans through their online platforms. All you need to do is to visit a lender's website, fill in the details, and upload your documents. Once done, the lender will check the documents and approve or reject your application. If the loan is approved, the amount is disbursed to your bank account within 2 to 3 business days, depending on the lender you choose
3. It is the Best Multi-purpose Loan
Need an urgent loan for taking a vacation? Or do you need one for renovating your home? While most other loans, such as a car loan for buying a car, an education loan for funding education, a home loan for buying a home, this loan can be taken only for specific purposes, you can also use the funds received from a personal loan for any other use.
While there are few other types of multi-purpose loans as well, such as credit cards or traditional loans, they tend to be more expensive than personal loan interest rates.
4. Tax benefit:
If you use the personal loan for the construction, renovation of a house, or making a down payment for the house, you can avail of the tax deduction of up to Rs 2 lakh for the interesting part in a financial year. But keep in mind that you will have to provide enough documents to prove that you will use the money for that purpose only.
5. Flexibility to choose the tenure:
The tenure of the loan can go up to 7 years, So you have the flexibility to choose a tenure which suits you the best. Longer holding means lower EMI. Therefore you can also decide tenure after calculating the EMI. You can use EMI Calculator online to calculate the EMI.
6. No limitation on end use:
The first and the most essential benefit of a personal loan is that unlike home loans it can be used for any purpose. You can use a personal loan for your benefit. If you have any urgent requirement of funds then a personal loan is the easiest way to get cash.
7. Pocket-friendly repayment:
You can pay off your loan in easy installments in 4 to 6 months, depending on your tenure, or pay with EMIs. The payment terms are usually flexible, and you can easily choose a tenure that allows you to optimize your monthly outgo according to your needs.
8. Simplistic Eligibility Criteria:
Customers who are residents of India, have to be between the age of 23 and 55 years to be eligible for this loan.
Besides, personal loans can also provide income tax benefits if you use them for home renovation, purchasing/constructing a house, or for higher education.
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