A personal loan is one of the most popular credit options in the market today. The loan is popular owing to its unsecured nature, simple eligibility criteria, quick disbursal feature, and easy loan application process. Unlike education loans, home loans or auto loans that can only be used for a particular purpose, you can use the personal loan proceeds for any personal reason, which is not speculative in nature. Despite this, many hesitate to hit on the personal loan apply online option owing to the lack of knowledge about the loan product.
Discussed here are some reasons why you must opt for the personal loan option to fund your big-ticket purchases –
No risk to security –
A personal loan gets approved based on your credit history and score. This means you do not require providing any form of collateral or security to avail the loan proceeds. All you require is a good credit profile and a strong credit score of over 750 to get personal loan approval. To build a good credit score, you must ensure to timely repay your dues in full and on time, maintain a credit utilisation ratio of within 30 per cent, maintain a balanced credit mix between secured and unsecured credit options, keep a continuous watch on the co-guaranteed or co-borrowed credit accounts for their timely repayments, and review your credit report periodically at least once in six months to rectify errors in the report, if any. A rectified report automatically enhances your credit score, which results in quick loan approval at a lower personal loan interest rate. This converts to serviceable personal loan EMI.
Flexible end usage of the proceeds –
Lenders do not put any restrictions on the end usage of the personal loan proceeds. You are completely free to use the personal loan proceeds for any reason as per your preference without being liable to provide any answer to the lender about where you used the sanctioned proceeds. However, note that you are not allowed to use the proceeds for any speculative motive. Proceeds from personal loans can just be used for financing personal needs like home renovation, destination weddings, overseas education, cost incurred when shifting to a new location, buying pricy gadgets or equipment or for meeting pressing needs like debt consolidation or medical exigency.
Simple eligibility parameters and application procedure –
A personal loan comes across as an ideal financing instrument as the option requires minimal documentation and eligibility criteria to disburse the loan proceeds. Just the basic criteria are assessed for deciding your eligibility, which includes your age, income, employment type and credit score. Documents required are your identity, address, and income proof. Today, owing to the development of technology, you can even avail instant personal loans or pre-approved loans, which is a 100 per cent digital and paperless option for securing the proceeds as per your need.
Flexible loan tenure –
As a personal loan is disbursed quickly, it assists in meeting your big-ticket expenses instantly. Fortunately, repaying your borrowed loan proceeds is also not a herculean task as you are offered a flexible loan repayment tenure of up to five years. This permits you to repay the loan proceeds conveniently without the need to worry about unaffordable monthly instalments. Also, you may use an online personal loan EMI calculator to compute a feasible EMI figure, personal loan interest rate and repayment tenure.
A personal loan is a go-to financial option for managing your big-ticket transactions with ease. However, before you hit on the personal loan apply option, ensure to use an online personal loan EMI calculator to compute the personal loan EMI and affordable interest outgo over the period as per your affordability and cash inflow. Doing so would allow you to worry less about the monthly repayments towards personal loans and simultaneously permit you to save and invest for your long-term financial goals.