5 Top Features of a Personal Loan
Despite the best planning, you might need immediate funds at some point in time. We have all been there, when life has thrown unexpected situations. In these circumstances,instant personal loans can be of great help. In addition to getting over financial contingencies, they can help in proactive financial planning. You can use the amount to start a new wealth creation plan, without disturbing your savings account.
There are many benefits like these behind the increase in instant personal loan applications. According to a report by CRIF High Mark, personal loan disbursement grew by 140% in F.Y. 2019-20, driven by huge demand among millennials. The report also stated that borrowers with annual income less than ₹3 lakhs increased to 86% as of March 2020.
Let’s look at the top 5 features that make personal loans appealing for immediate fund requirements.
1. No Requirement for Collateral
Since personal loans are unsecured, you do not have to provide any assets as collateral to your lender. This makes it a good option for people without any assets to speak of. For example, if you need immediate financial assistance for your new business requirements, but already have some of your assets tied up in another loan scheme. This is also an advantage when you have to meet urgent expenses, like medical treatment bills.
2. Minimal Documentation
There is less paperwork necessary in instant personal loan applications. This allows for quick and hassle-free processing. Moreover, you can conveniently upload the necessary documents online, in digital KYC processes.
3. Pocket-Friendly Interest Rates
If you have a good CIBIL score and stable income, you can obtain affordable interest rates. This reflects on your EMI amount. Higher interest rates mean a higher monthly EMI.Use a personal loan EMI calculator to understand the impact on your monthly expenses. This can also be one of the factors towards choosing the best bank for personal loans. Look for a bank which offers attractive interest rates.
4. Flexibility in Usage of Loan Amount
Unlike some other loans, you can use personal loans for a variety of purpose. This can include home renovations, planning a wedding, paying towards education or any other purpose.
5. Quick Pay-out of Loan Amount
Digital banking processes ensure that you can complete all formalities at the earliest. Even in the physical process, minimal requirements for documentation means that you can get the loan amount quickly. Lenders can provide digital disbursals through e-signs/e-stamps leading to faster credit in your accounts.
With flexible loan tenures, online payment option, attractive interest rates and substantial loan amounts, instant personal loans can be a practical solution for your contingencies. You can also claim a tax deduction when you use the loan amount for purposes like home renovation, or towards other investments under section 80C.
Make sure you satisfy the eligibility criteria before applying for a personal loan. This includes maintaining good credit behaviour. Also, multiple applications to different lenders can impact your CIBIL score. This is why; it is a good idea to check the offerings of various lenders before settling for the best personal loan offer.