10 Advantages of Taking a Personal Loan Over Other Types of Credits

Credit tools help you tackle a financial crisis effectively. One might need extra funds for big-ticket expenses like paying for education, buying a vehicle, purchasing a gadget or applicant, dream wedding, home renovation, high-value investment or medical expenses. A personal loan can ease the financial burden by financing up to Rs 25 lakhs* no matter the cost. The borrower can then repay the loan by breaking the loan amount into affordable EMI payments within 5 years. But why should one choose a personal loan, you might ask?

Due to their lower interest rates, personal loans are beneficial over other types of unsecured credit like credit cards, payday loans, business loans, etc. This is why loans have become popular among many salaried individuals when facing financial constraints. Let’s check the benefits these loans offer over other types of credit.

Zero Collateral

Easy personal loans offer you the freedom of not having to pledge any form of collateral for security. The approval process is only based on eligibility for credit score, income and job type.

taking personal loan

Minimal Documentation 

Personal loans do not require the borrower to furnish exhaustive piles of paperwork. One can quickly avail of personal loans by uploading scanned copies of the Aadhaar card, Pan card, income proofs, and bank statements.

Simple Loan Application Process

 The personal loans application process is reduced to just four clicks with digitisation. One needs just to fill in an online application form, upload documents and wait for the lender to call back with the best loan schemes. On choosing one, the loan will be sent for the approval process.

Higher Loan Amount

Personal loans give you the freedom to borrow up to 25 lakhs*. The funds availed do not have end restrictions on usage like other loans, and hence it can be utilised to combine multiple requirements.

Lower Interest Rate

Personal loans have lower interest rates than other unsecured credit types. Additionally, choosing a lender who offers the best personal loan rates can further reduce the interest rates. Hence, it is recommended to avail yourself of personal loans if you are looking for immediate funds. 

Easy Access

Online personal loans are available through mobile apps. Hence you can access personal loans 24*7 on the go. Therefore, you can apply for the loan comfortably without visiting the branch for formalities. The approved funds will reach the borrower’s bank account within a few hours to a few days. This makes the loans an excellent alternative to credit cards but at lower interest rates and easy repayment terms. The loan EMIs can also be paid online conveniently.

Simple Eligibility Criteria

Personal loan eligibility conditions are primary compared to other credit types. One needs to complete minimal formalities in terms of documents and eligibility. Though these criteria vary depending on the lending institution, the most frequently expected eligibility criteria are your age, job stability, credit score, income and job experience.

Quick Loan Disbursal and Transfer

Personal loans are approved chiefly within 24 hours if the documentation is intact. The funds will then be disbursed to the borrowers’ bank account within the next 30 minutes of sanction. Hence, personal loans are the quick ways to receive immediate funds for extreme situations.

Pocket-friendly Repayment

The payment terms are flexible with personal loans. One can choose the tenure and the EMI that suits their budget. You can determine the EMI and tenure with the help of a personal loan EMI calculator where one can enter the loan amount, interest rates, and a term of their choice and determine an affordable EMI by changing the tenure combinations.

Credit Booster

Personal loans also help add to credit diversity, boosting credit scores. A credit score is one of the significant factors that secure the best loan deals. Since one can choose the EMIs as per their budget, missing out on repayments is minimal. Hence it helps build up the credit history with time.

Unlike other forms of credit, personal loans also have a structured repayment plan. You can also plan your expenses using calculator tools with the lender and repay comfortably. It is cheaper than other forms of credit and hassle-free to avail. Thus, choosing personal loans is ideal financial aid for those who require credit.