Personal loans are unsecured lending facilities extended by banks and financial institutions to the borrowers against consideration in the form of interest. They are some of the most sought-after financing arrangements among the borrowers. Due to its benefits and features, it has always remained a preferred choice. Let’s see what makes personal loans so much popular:
Features of Personal Loans:
Following are the features of a personal loan due to which it becomes a primary choice of borrowers:
1. Affordable interest rates: Personal loans are some of the most affordable financing arrangements compared with other unsecured lending facilities like credit cards. While the interest rates on credit cards can go up to 24%-36% per annum, personal loan interest rates start at just 10.99% per annum. This makes personal loans pocket-friendly.
2. Unrestricted End-use: Personal loans come with unrestricted end-use, making them a preferred choice among borrowers. The funds received from personal loans can be used for any purpose like meeting medical emergencies, marriage, education, buying your dream house, travel, etc.
3. No Security Required: As personal loans are unsecured, it does not require any security. This increases its reach to a wide section of society. Therefore, you do not need to worry about your assets as no charge is created on them.
4. Instant Processing: Personal loans are easy to avail facilities, and as they have minimum documentation requirements, therefore, they are processed and disbursed instantly by banks and financial institutions. Even the application for personal loans can be made online in easy steps.
5. Easy Eligibility Criteria: Personal loans have easy to fulfil eligibility criteria that make them a preferred choice for borrowers. Following are the requirements to avail of a personal loan:
- Age: The applicant’s age should be between 22-58 years.
- Income: The income of the applicant should be above Rs. 15,000 monthly.
- Experience: The applicant should have work experience of at least one year.
6. CIBIL Score: As personal loans are collateral-free, a CIBIL score becomes essential to assess borrowers’ creditworthiness. A CIBIL score above 750 increases the chances of getting your personal loans sanctioned.
7. Debt Consolidation: There might arise situations where you are stuck with multiple loans. This may lead you to fall into a debt trap and affect your CIBIL score adversely if you are not regular with repayments. Also, remembering EMI dates may become cumbersome. Here, you can use personal loans to repay your other loans. In this way, you will only need to repay one loan, i.e., a personal loan. You can also get out of the debt trap by using personal loans to repay high interest-bearing loans and facilities like outstanding credit card bills. This is known as debt consolidation, where more than one debt is consolidated into a single debt.
Personal Loan EMI Calculator
If you are concerned about the EMI amount, you can use a personal loan EMI calculator. You just need to enter the loan amount, personal loan interest rate, and tenure to get the exact amount of EMI that you will need to allocate from your monthly budget.
Bottom Line
With so many features and varied uses, personal loans have been instrumental in helping people meet emergencies and acted as a saviour when crises knocked on their doors. Being collateral-free and affordable, people often resort to personal loans to meet their requirements. If you are looking towards applying for a personal loan to meet your requirements, then you are on the right track. Apply now with the most affordable rates and flexible tenures.
