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Personal Loans – Advantages and Disadvantages

· Finance,Personal Loan

Going for an instant personal loan is probably the best idea when one is facing a sudden shortage of cash and needs to make financial arrangements for something really important like:

  • Travel
  • Their Wedding
  • Higher education
  • A medical emergency

Both NBFCs and banks offer personal loan online and applying for one has become easier thanks to the digital age. That being said, everything has their fair share of pros and cons and personal loans to have these.

Let’s take a look now, shall we!?

Advantages

  • A personal loan can be applied by anyone for a variety of reasons, as mentioned earlier. One can not only use a personal loan to pay off other debts but also use the credited amount for renovating their home.
  • These loans are known for their quick Turn Around Time. After all the formalities are completed, the loan amount gets credited to the account of the applicant within twenty-four hours – in case of NBFCs. The same takes only a couple of days for banks.
  • An applicant can ask for a personal loan of up to 25 lakhs. As long as your credit score is well within the recommended levels and you have the necessary financial portfolio that indicates you are capable of paying your dues in EMIs on time, every month, you are all set!

Disadvantages
A personal loan doesn’t demand any collateral from the applicant which is why the interest rates are pretty high when compared to secured loans. That being said, the differences in interest rates between secured and personal loans are usually between 3-5%.

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