The first question, which would arise in your mind, when you think of going for a personal loan, is that whether it would be beneficial to avail the loan or not.
The answer to your question depends on the circumstances. If you are in crucial need of money but don’t have any assets or own credit card, a personal loan is certainly the answer. This is because personal loan would result in a practical decision rather than cash withdrawal, which would be expensive. But if you have assets like property, gold or shares, it would be valuable if you will consider a personal loan against any of these assets.
In the case of quick loan, without undergoing the tiresome documentation, without giving any reason for the loan, personal loan is advisable because you will get it easily in as short as 24 hours. All that you need to do is fill the application form with the lender and the cheque would be granted to your doorstep as soon as possible. However, before you go for a personal loan, you must go through the pros and cons of a personal loan, in order to make a wise decision.
Personal loans provide:
- Flexibility of use: They can be used for various purposes, ranging from medical expenses, travel expenses, purchasing the latest jewels, gadgets, house improvements or other liabilities.
- Quick Availability: You can get the loan as soon as possible.
- Minimal documentation required: Normally the processing time of personal loan is less as it doesn’t require much documentation.
- No collateral or security needed: Security is not required to apply for this loan, and the loan tenure is less as compared to home loan or car loan. Personal loans don't need any security, so your assets are safe. It makes this kind of loan attractive.
Despite their attractiveness, personal loans do have their fair share of disadvantages that are:
- High-interest rates: As these loans do not require any security, they are regarded as high risk. So in order to overcome this risk, high-interest rates are charged
- No part payments: Payment before the completion of tenure is not allowed by most of the lenders. This restriction can be expensive since your initial installments go towards interest payments.
- Requirement of good credit rating: This loan requires strict eligibility criteria based on credit worthiness
So look before you choose!!