Personal loans are a life saviour during a financial crunch. They are instantly available and fall into the unsecured loan category due to which they require no collaterals thus, enabling quick disbursement. Today, more and more people are applying for such loans, thereby, leading to its consistent year-on-year growth. Though there are numerous reasons for an instant personal loan. Some reasons are popular and almost the same everywhere. Thus, below are some of the reasons to get a personal loan.
• Simplifies Access to Funds: You can apply for a personal loan without pledging any valuable assets as collateral. With zero risk to your assets, a personal loan is an excellent financing tool for big-ticket purchases. Lenders will, however, need to consider your profile, your credit score, and your financial history before they approve you. Keep your credit score at 750 or above to qualify for this easy loan.
• Affordable Interest Rate: As the repayment is based on an interest rate which is decided in yearly percentage at the beginning of the loan period, the borrowing becomes affordable with personal loans. It is one of the best possible ways, especially during Covid, as the interest rates are reasonable. Also, the interest is considered on a reduced balance reducing the actual interest payment. If you are a first-time borrower, the interest rates are higher than tenured borrowers as they have a high credit score.
• No Physical Documentation: Another significant reason to get an instant loan app is the paperless documentation procedure that does not require any kind of paper work. The minimal required documentation is uploaded on the preferred instant loan app and processed in real-time for instant approval.
• Light on Collaterals: Personal loans are unsecured, which means they do not require collateral to be obtained. This is why personal loan approvals are easier to get than other types of loans, such as home loans, auto loans, and so on. In addition to income assessment, this also requires the lengthy process of ascertaining your fund utilization and verification of collateral offered.
• Debt Consolidation: Debt consolidation is one of the most common reasons for taking out a personal loan. When you apply for a loan and use it to pay off multiple other loans or credit cards, you’re combining all of those outstanding balances into one monthly payment. This grouping of debt makes it easier to work out a time frame to pay off your balances without getting overwhelmed.
• Provides You With Affordable Funding Options: Based on your credit score and eligibility, most lenders offer you attractive interest rates on personal loans. Comparing various lenders will allow you to choose the one offering the most competitive rates. You can plan your finances easily this way. Pick a lender that charges low processing fees, EMI bounce fees, and prepayment fees.
An instant pre approved loan can be a smart financial decision for those who need quick and hassle-free access to funds. However, before availing of the loan, it is essential to understand the terms and conditions, including the interest rates, repayment tenure, and prepayment charges, to make an informed decision.