Any individual may have to go through times of financial distress depending on the circumstances. In these situations, opting for a personal loan may be a smart decision. A number of financial institutions provide instant personal loans which help take care of immediate monetary requirements.
What is a personal loan?
A personal loan can be defined as a financial instrument, which an individual can use for short-term financial requirements such as financing a family vacation or renovating a house. It is an unsecured loan with no need to pledge an asset as collateral. Evidently, interest rates are generally higher in comparison to other secured loans.
Personal loans are the most convenient in cases when an individual needs immediate financial assistance. Fast approvals, quick disbursals, and flexible tenors are some of the reasons why people opt for such a loan.
Benefits of personal loan
Following are some of the reasons which make personal loans a go-to choice in many cases:
- Lower interest rates
Financial institutions offer lowest interest rate personal loan to borrowers who have an above-average credit score. With good credit, a personal loan can be availed at competitive interest rates, which make it a much better choice compared to credit cards.
- Diversity of usage
The benefits of personal loans include the fact that an individual can use the cash for any purchase. These loans do not come with end-use restrictions. One can also avail a personal loan for medical emergencies, to meet sudden financial requirements. There are other loan types which may place restrictions on the purpose of utilisation of the funds.
- Improve credit score
Provided an individual does not have diversity in types of credit used, a personal loan can help. Having a personal loan reflects well on the credit score. It is one of the easiest ways to clear any dues and restart the debts with newer terms. It helps to improve credit history, which enhances the credit score. Also, a personal loan is always paid back in instalments, which help create a good impression on the lender.
- Higher borrowing limit
A lot of financial institutions provide larger sums on personal loans up to Rs. 25 Lakh. This makes it a financing option worth opting for. There may be times when a large amount may be required on a short notice. Personal loans can help you out in such situations.
- Joint application
There is also the possibility of applying for the loan jointly or by oneself. Having a co-borrower means the application will be processed in a much higher income bracket, which makes you eligible for a more substantial loan amount. In spite of the easy personal loan eligibility criteria, if an individual has a bad credit history, the chances of success may be low.
- Pre-paying loan
Most financial institutions allow the borrowers to prepay the loans after a specific number of repayments had been made. The charges of prepayment may be levied on the outstanding loan amount.
Bajaj Finserv offers various other facilities along with easy personal loan eligibility criteria which make these loans a fruitful source of financing. Not only that these loans also require minimal documentation which makes availing them quite hassle free.
Bajaj Finserv brings with them several such loan options across affordable rates of interest and flexible repayment tenors. Bajaj Finserv also provides pre approved offers on personal loans, business loans and other financial products. Availing finances are made simpler by these offers, and it also saves time. Provide a few necessary details online and check your pre-approved offer.
It is always recommended to go through the available options before availing a loan. Every individual should pay attention to the various clauses and benefits associated with every option. In case of planned purchases, however, a personal loan is always the most preferred.