There are myriad of desires which go unfulfilled because of lack of funds. You must have considered taking a loan to fulfill your desires and aspirations. The paperwork and the time the bank will take to process your loan is sure to daunt you. The biggest problem is to find something of sufficient value to pledge as collateral. However, the solution to all these problems is simple. You can think in terms of taking a personal loan. In this article, we will discuss the benefits of getting a personal loan.
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Benefits of Personal Loan
There are various types of loans available. Every other kind of loan takes a while to be processed. But a personal loan is free of the troubles that all other loans subject the applicant to. Below mentioned are the benefits of personal loans:
- Online Applications: Most banks allow an account holder to apply for personal loans online. This saves you from going to the bank and waiting to find an employee who is free to attend to you.
- Quick Sanction of the Loan: A personal loan is ideal if you require money in a hurry. An account holder gets a loan almost as soon as it is applied for. The other plus point is banks disburse loans on the very day it is sanctioned.
- Documentation: Another benefit of personal loan is that there is hardly any requirement of paperwork in a personal loan because it is an unsecured loan.
- Proofs Required: If you can provide your address proof, identification proof, and income proof, the loan is yours to enjoy.
- No Hidden Charges: Most banks encourage their customers to take personal loans. This is why there is very little paper work involved. Another way that the banks make personal loans attractive is by ensuring that all the charges are up front. In this manner, the applicant is saved the burden of paying hidden charges. Hidden charges ultimately hike up the rate of interest in a loan. This is another reason why personal loans are popular.
- No Collateral: Personal loans are unsecured loans, therefore, they do not require any collateral.
- Free Usage: Every other kind of loan binds the borrower to use the money for the purpose for which the loan was sanctioned. If it is a business loan you have applied for, then you have to use it for business only and nothing else. If you have taken an automobile loan, then you must buy an automobile. But personal loans do not bind you in any manner. Only a personal loan allows you to spend the money as and where you want to spend it
- Repayment: An account holder has a choice in the repayment plan of a personal loan. Repayment could be made lump sum, in a few installments or it could be spread over many months in equated monthly installments. The choice lies with the applicant.
- No Penalty: There is a penalty for part payment or early repayment of personal loans.
- Easy Transfer: As an account holder, it is easy to instruct the bank to transfer the installments for repayment. You are spared the trouble of manually transferring the money for repayment when it is due. Timely repayments will help in keeping your credit score healthy.
These benefits of personal loans make it so popular; however, these loans come at a higher interest rate. So, one must do the cost-benefit analysis before applying for a loan.
Note : Finance blog
