What Are the Reasons for Personal Loan to Be Popular in India?
Personal loan is a type of unsecured credit option that financial institutions like NBFCs, banks and various other online lenders provide to you as a borrower to avail funding for your own requirements. Your credit score, income, and past repayment record are used by the lenders to assess your loan eligibility parameter. In India, personal loan is available for a period of up to 5-6 years. Besides the regular traditional form of personal loans, lenders have also come up with pre-approved personal loan forms like Baroda Preapproved personal loan or BOB digital personal loan, BOI pre-approved loan, SBI pre-approved loan, etc. These types of personal loans are approved on the same day of submitting the application for a personal loan with zero need for submitting any documents to avail the loan proceeds.
Various stats state that in the past few years, the number of instant applications in India has drastically surged. It is not tough to understand why now many prefer to avail personal loans. This is all because of the benefits linked with personal loans. They can be accessed easily; they are security or collateral free and offer a reasonable rate of interest. Also, they are quick and simple to set up. Also, the most important reason is that you can freely use the proceeds provided on personal loan for any purpose. Due to such benefits, there has been a drastic enhancement in the popularity of personal loans. Covered here are the benefits in detail linked with personal loan.
Convenience –
You can place the application for personal loan with various lenders like banks, online financial institutions, NBFCs, etc. Moreover, the majority of loan applications and sites show that the maximum loan proceeds you qualify for is based on your income you earn monthly when applying for the loan on the online platform. Moreover, you get the choice to upload the documents for personal loan too. After deducting the processing fees, the loan proceeds are transferred straight into your account once your application is approved.
Also Check: BOB Digital Personal Loan
Hassle free process, quick approval, and loan proceeds disbursal –
Previously, personal loans were very slow to get approval by the financial institutions. You had to submit plenty of documents and wait for a lot of days and even then, there was zero assurance that the loan application would be approved, and funds would be processed on time. But owing to the advent of digitalisation, placing an application for the personal loan, and getting the loan proceeds on time has become simpler. Your personal documents for the loan can be uploaded quickly on the online platform. As soon as the personal loan application is approved, the loan proceeds are instantly deposited to your bank account. From personal loan application to disbursement of the loan proceeds, the whole process is carried out online quickly. You can place an application through the online mode in this way and get your loan proceeds without even the requirement of meeting your lender directly. Moreover, thanks to the quick personal loan disbursal, you can meet your immediate requirements very easily.
Debt consolidation –
Owing to the availability of distinct financial products, many find themselves in a massive debt trap. With a personal loan, you can easily get out of this debt trap with ease. All you need to do is to consolidate your debt with the proceeds you receive through the personal loan. As your personal loan rates would be lower than the cumulative loans, you would also be able to save a lot on the interest constituent outgo. You can thus replace your high interest loan through this financial solution.
Zero restriction on the loan proceeds usage –
The potential to use the personal loan to finance any purpose is its major benefit. This isn’t the scenario with 4-wheeler’s loan, home loans, which can just be used for the specific purpose for which they are designed. So, unlike a normal home loan, you can be taken up to purchase properties, and auto loan, which can just be utilised for buying 4-wheelers, a personal loan option can be utilised for mitigating any financial requirements. You can make use of the personal loan proceeds to pay for your vacation abroad trip expenditures, new furniture, wedding expenditures, education expenditures, purchasing a used 4-wheeler, unexpected healthcare bills, etc.
Security free –
The fact that a personal loan is readily available with zero need for a collateral or security is one of the major reasons more people select them in India. As personal loan is an unsecured credit option, you do not require offering any collateral, security, or guarantor for the loan approval. This isn’t the case with a secured credit option availed for major buys. Your repayment capacity within the allotted time-period is one of the major criterions considered when approving your personal loan application.
Flexible repayment tenure –
The typical loan repayment tenure for the instant loan ranges anywhere between 1 year and 5 years. You might select the repayment tenure that best matches your requirements. However, you must be aware that the personal loan rate of interest with higher terms is considerably higher than those loans with lower terms. An instant loan is easy to repay too. Loan repayments are done in a simple way with features like adjustable terms for repayment and low EMI amount. Moreover, availing an instant loan and making the EMI repayments on time also increase your credit score. So, ensure to note that a higher repayment tenure leads to smaller EMIs but a higher interest constituent. So, you must be flexible in picking with your repayment choice. Ensure to pick the one that matches your financial situation and preferences.
Simple eligibility –
Eligibility requirements for personal loan are clear and simple. You must meet the following needs to qualify for the personal loan –
You must be between the age of 22 years and 60 years
You must be an Indian citizen
You must have a full-time job at a private and public organisation
You must have a job experience of nearly a year with at least two months of stable experience at the present organisation.
