Life can be uncertain at times and financial issues, even more so. In such situations, a personal loan can be quite helpful. This loan is meant for personal use and is a valuable armor for any financial setbacks. However, before applying for a loan, you need to check with your eligibility criteria set by the lender you want to apply for a loan. The lender will determine your loan eligibility by looking at your credit score, monthly income, and repayment history. If you qualify under the set criteria, your application process will speed up, and you can get the loan disbursed in no time. Numerous factors can be attributed to why personal loans have been growing in popularity. Some of them are as follows:
- Multiple Usages
With an instant loan, you can easily finance for a variety of purposes, unlike other options like a home loan or a car loan that can only be used to finance a specific goal. You can use this money to fund any personal expenses such as financing higher education, business expansion or travel expenses. The versatility of a personal loan makes it quite popular among people. Several banks now offer loans to prospective borrowers at attractive rates of interest along with a few perks and discounts.
- No Collateral Required
The best thing about getting a loan is that they are unsecured, so the borrowers are not required to pledge any of their valuable assets as collateral. However, for secured loans that have been availed to finance a big purchase. The lender takes into account the borrower’s ability to repay the loan within the specified loan tenure. The only crucial factor taken into consideration by the lender is the borrower’s repayment ability and credit history.
- Short Processing Time
Personal loans have a shorter processing time compared to other loans. Since unsecured loans do not require any collateral, once the documents are submitted, the loan gets disbursed within 24 to 48 hours. Faster processing time is quite beneficial in times of instant cash requirement.
- Minimal Documentation Required
Since personal loans are unsecured type, they require minimal paperwork. Banks and other lending institutions do not require any verification of assets for loans. To apply for a personal loan, you are only required to submit proof of address, proof of identification, and proof of income.
- Easy Online Application
Lenders offer online applications for all kinds of loans. Many banks and NBFCs have their own personal loan apps, where the applicants can quickly fill in the application process and get a loan. Finserv MARKETS app is one such app that offers instant loans and provides the borrower information about the amount that they are eligible to borrow based on their monthly income. Borrowers can submit the required documents online, and once the application has been approved, the loan amount is transferred to the individual’s bank account after deduction of the processing fee.
- Flexible Loan Repayment
The repayment tenure for personal loans ranges between 1 year and five years, and the borrowers are free to choose the tenure as per their convenience. This gives the borrower flexibility on making payments towards their loan without having to worry about their finances. However, the rate of interest charged on longer loan tenures tend to be much higher than those charged for a shorter tenure on a loan.
- Debt Consolidation
One of the most crucial reasons personal loans are a popular option for financing is that it can be beneficial with consolidating debt. If you want to apply for a loan to pay off credit card debt or foreclose other loans, you can do that with the funds acquired from a personal loan.