There are now many different types of loans available in the market. In fact, there are now specific loans for most large expenses such as buying a house, home improvement, automobile loan, and even education loan. But why do many borrowers still prefer personal loan? Read this post to find out.
Borrowing a loan is one of the best ways to manage large or emergency expenses. You get to borrow a lump sum amount for your expenditure, which you can then repay in easy monthly instalments. Moreover, to suit the needs of the borrowers, lenders in India now offer different types of loans.
However, while there are different loan products available in the market, personal loan continues to be one of the most popular options. Why do borrowers prefer personal loans? Here are 5 of the biggest reasons-
- Multipurpose Loan
Unlike a home loan, car loan, or education loan, there is no restriction on how you use the loan amount when you take personal credit. You can use the money to manage the expenses of a wedding, a medical emergency, home improvement, or even a family vacation or buying the latest gadget. It doesn’t matter to the lender how you use a personal loan, as long as you repay the amount in a timely manner.
- Faster Disbursal
Many people need quick access to money for managing a financial emergency when they apply for a personal loan. For the convenience of such borrowers, lenders in India now disburse personal loans in a matter of hours. If you meet the eligibility requirements of the lender and have a decent credit score, you can apply for a personal loan and get the loan amount into your bank account within a single working day.
- Flexible Loan Tenure
Personal loans are generally short-term loans with the maximum repayment tenure of up to 5 years. But within this maximum tenure, a borrower can easily select a duration that they are comfortable with.
You can take the loan for one year, two years, or up to the maximum tenure. It entirely depends on you. However, note that while longer tenures help in reducing the EMI amount, they increase the overall interest you repay to the lender. So, make sure that you select the loan tenure very carefully.
- Zero Collateral Required
One of the biggest benefits of a personal loan is the fact that it unsecured in nature and doesn’t require you to submit any collateral or security to borrow the loan account. This makes them a go-to option for people who do not have any collateral, which they can use for taking other types of loans.
- Easy Repayment
With personal finance, you can easily repay the borrowed amount in easy monthly instalments. Most lenders are generally flexible and let you select the loan tenure and EMI amount of your choice.
Moreover, there are now also online personal loan EMI calculators that you can use to easily calculate your EMI based on the loan amount, interest, and loan tenure. Use such calculators to make an informed decision.
Be a Responsible Borrower
While there is no denying the fact that personal loans come with many benefits and can be used for many different reasons, it is essential for people to borrow responsibly. Only borrow what you genuinely need and select an amount that you can comfortably repay