A personal loan is an amount of money that an individual can borrow to use for various purposes. If you require funds to fulfil a personal expense, consolidate debt, ease a liquidity crunch, pay for a medical emergency or any other requirement, a personal loan is an individual’s best and easy choice.
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Quick Look
Irrespective of all the planning an individual does for his/her finances there are circumstances where financial needs occur all of a sudden and mostly it occurs when the person least expects it. In such cases, an individual resorts to either loan, borrowing money from known people or spending a credit card. Each of these options has its pros and cons. there are two types of major loans.
The two types of major loans are as follows:
- Secured Loans: Any loan that has collateral or security against it is a secured loan.
- Unsecured loans: An unsecured loan is when an individual borrows money without using collateral or any kind of security.
If you require funds to fulfil a personal expense, consolidate debt, ease a liquidity crunch, pay for a medical emergency or any other requirement, a personal loan is an individual’s best financial resort. A personal loan is an amount of money that an individual can borrow to use for various purposes.
Personal Loan
A personal loan is a type of unsecured loan amount of money that an individual can borrow to use for various purposes and is a fixed amount distributed as a lump sum. If an individual requires funds to fulfil a personal expense, consolidate debt, ease liquidity crunch, pay for a medical emergency or any other requirement, a personal loan is an individual’s best financial resort. The lump sum from the personal loan can be used to fulfil various expenses, such as home renovations, marriage expenses, medical emergencies, funeral costs, etc. It is a multi-purpose loan.
Types of Personal Loans:
- Unsecured loans
- Cash advance loans
- Single payment
- Secured loans
- Instalment loans
- Lines of credit
- Fixed-rate loans
Features of Personal Loan
- Interest Rate: The interest rate of unsecured loans is higher in comparison to other loans whereas the increasing competition among the competitors benefits an individual to choose the bank with less interest rate.
- Repayment of Personal Loan: repayment of a personal loan is comparatively easy because of the convenient options available to an individual such as post-dated cheques, online payments of EMI etc.
- Minimal Paper Work: Personal loan is easy and convenient because of less paperwork that is needed to get the loan approved as banks understand the urgency of an individual some of the banks process the loan within 48 hours of applying.
- Time Period or Tenure: An individual gets enough time to make the repayment of the loan with equal instalments.
- No collateral needed: No collateral is needed in securing a personal loan.
Process for applying for Personal Loan
- Filling the loan application form
- Submitting form and documents
- Sanctioning of loan
- Executing the agreement
Where to Find Personal Loans
Different banks have different criteria according to which an individual can apply instantly for a personal loan. Some of the basic criteria are:
- A person should be at least 18 years of age.
- A steady job with a regular monthly income
- Bank account
- Valid phone number and email address.
The first place to look for personal loans may be an individual’s current bank or credit union. Any personal banker can advise an individual on what types of personal loans may be available and the borrowing options for which the person is most likely to qualify.
Personal loans can also be found online. Numerous lenders offer personal loans online. You can apply electronically, get a decision in minutes and, in some cases, get funding in as little as 24 to 48 hours after loan approval.
When comparing personal loans online or off, pay close attention to the details. Specifically, consider the following:
- Interest rate
- Fees
- Repayment terms
- Borrowing limits (minimum and maximum)
- Collateral requirements
Instant Personal Loan
The term instant personal loan generally refers to small-ticket personal loans availed using lending apps. Instant loans are also known as instant cash loans or online loans. Lending apps backed by NBFCs offer borrowers a hassle-free instant personal loan in just a matter of minutes or hours with minimal documentation. The loan applications are within 1 minute of application submission. Borrowers can get instant loans with a range of Rs 1000 to Rs 5 lakh. Even Paytm has instant loan options available for its users.
Eligibility to apply for Instant Personal Loan
In order to apply for an instant personal loan. Generally, in unsecured loans, the risks of defaults are more. One needs to check credit eligibility and understand the possibility of getting the loan approved. A personal loan eligibility calculator can be used in this case and the free credit score check.
Takeaway
A personal loan is a type of unsecured loan amount of money that an individual can borrow to use for various purposes and is a fixed amount distributed as a lump sum. If an individual requires funds to fulfil a personal expense, consolidate debt, ease liquidity crunch, pay for a medical emergency or any other requirement, a personal loan is an individual’s best financial resort.
