5 Pros and Cons Of Taking Personal Loans For Your Financial Needs

Need Personal Loan????? We all the time receive phone calls from sales representatives of various banks pitching us to take personal loans. Our in-boxes are flooded with attractive personal loan offers all time offering quick cash flow. You can use the cash for anything you wish for like traveling to some exotic location with your family, get immediate cash to fund higher studies of your kids, settle for some home renovation and so on. Sounds like pretty sweet arrangement!!!  To have a freedom to access to quick cash is irresistible – we all wanted to. But if you are thinking out to taking personal loans, you need to weigh down the pros and cons of personal loans too.

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We Understand First – What Is A Personal Loan?

We all get those phone calls and emails about taking personal loans from banks and private lenders of India, but do we actually understand what is personal loan? Personal loans are collateral free loans, which are approved and availed easily in as much as little 24 hours. Personal loan is a quick cash which people borrow from the leading personal loan providers of India and use it for various expenses like wedding, higher studies, rental deposits, auto loan, settling credit card bills, emergency medical expenses etc.

These days, the majority of the banks and Fintech loan companies offering personal loans at competitive rates and great offers along with. There isn’t much criteria to fulfill when it comes to taking personal loans. Personal loan eligibility requires of having you of minimum 21 years of age with a steady source of income, good Cibil score and photo identification proofs to go with. All you have to do is gather the supporting documents with your loan application and submit it. You get the approval immediately.

Taking Personal Loans

Personal loans are unsecured loans, which are relatively easy to obtain and can be paid back in easy installments in few years. To get personal loans, you can inquire by searching “personal loans near me” or download personal loan apps or browse over the Internet for instant personal loans. Believe it, you will discover personal loans with quick approvals in plenty.

Personal loans are designed keeping in mind the consumers willingness to afford them. They come with the choice of varied easy repayment alternatives ranging from 2 to 10 years.

The reason behind the soaring popularity of persona loan is they are less fussy to get. You can avail it under any circumstances, in fact you can have personal loan for low cibil score. These unsecured loans are offered by top personal loan providers in India at affordable rate of interest as they have transparent loan processing.

However; there are obvious pros and cons to taking a personal loan. The significant ones are listed below:

Discover The Pros Of Personal Loans

1.Personal Loans Are Unsecured

This means, you don’t have to pledge any of your valuable assets as a collateral. It is a collateral free loan hence; your personal loan provider won’t be asking for any. Depending on the bank or the lender you are approaching, the rate of interest might differ. But; the best part is these loans are collateral free and consumers can avail “x” amount to fulfill his/her financial requirements.

2.Quick Approvals

With less fuss of paperwork, the personal loans are instantly approved. Some of the leading banks like ICICI personal loan offers spot approvals. Since; personal loans can be availed through several banks or private lenders with very less paperwork; consumers can think of getting quick cash in as little as 24 hours. When taking personal loans, the loan providers have basic criteria to fulfill and they immediately disburses the loan.

3.Flexibility To Use Loan Money

For certain loans, it;s mandatory to use the loan money under it has been availed. For personal loans, there is no such rules. The loan money can be used for various purposes such as higher education of your kids, international holidays, wedding expenditures, jewelery purchase, buy a vehicle, settling medical bills, home renovations, paying of your credit card bills etc.

4.Paying Low Interest Rate Personal Loans

Yes, you read it right. Personal loans are low interest rate loans when compared with other loans. They are personal loans which means they are not huge in amounts and they are availed to take care of personal needs. Easy on pockets therefore; these loans have proved to be the blessings to those who are in need of immediate cash.

Cutting your personal loan interest is the main reason for debt consolidation. Hence; it is wise to pick the low interest personal loans so you can repay it back quickly, also it is easy on your monthly expenditure and not to forget in case if you are thinking to settling down the loan that can be possible with low rate of interest.

5.Fixed Monthly Installment For Fix Number Of Years

Having one fixed EMI of your personal loan can simplify your financial life. You only have to keep track of one fixed amount and its due date. Moreover; you can focus your attention on making a single payment instead of be on the toes all the time of multiple payments.

   Discover The Cons Of Personal Loans

1.Not Offered Part Payments

While taking personal loans, you need to know this that majority of the personal loan providers of India do not allow part payment of loans. This means you end up paying the loan for the entire tenure of the loan. It can be expensive in the long run, since your initial monthly installments are waved off repaying the interest of the loan.

2.You Need Good CIBIL Score

Yes, it is compulsory to have a good credit score for obtaining personal loans. Surely, there are bad credit personal loan providers in India; but they offer loans at a very high rate of interest. Consumers who do not have good Cibil Score are offered loan on higher rate of interests, however; the loan amount may be slightly less and the loan tenure not the usual one that others are having.

3.Variable Loan Interest As Per Your Credit Rating 

So, when you are taking personal loans, it is important that you do personal loan comparison. You will find a  loan calculator and eligibility criteria at the website or over the web . There is a fixed credit score which is mandatory to for those lenders, who offer loans to the borrowers with poor rating. They also impose stricter repayment terms on these borrowers.

4.Your Bank/Lender Can Still Sue You

Even if a personal loan isn’t backed by any collateral, a lender or bank may still be able to place a lien on your assets in order to secure repayment. The bank or lender may sue you in the court. Additionally; paying for the original loan amount you borrowed and late fees, you are forced to pay for attorney fees and court costs.

After it’s all said and done, you could end up with a stain on your credit report and your wages could be garnished in the event of a successful lawsuit.

5. Smaller Loan Amount

It is no surprise that banks/financial services are offering personal loans to make money by charging interest on the loans. But; there’s no profit if is not paid on time. That is the reason banks/lenders limit the risk of borrower default. They check credit, verify employment, as they might limit the amount of loan.  Especially; if your credit score is low.

Final Thoughts

If you are asking which bank is best for personal loan, or how much amount of personal loan you should get?Well it entirely depends on the person’s choice. Personal loans are great quick monetary option but they do have their advantages and disadvantages. Do personal loan comparison to get a better clarity of what kind of loan commitment you are getting into.

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