Individuals take loans for numerous reasons, including education, purchasing a home, medical emergency, debt consolidation, and many more. However, out of different types of loans available in modern times, personal loans are gaining immense popularity. This is because people can avail of these loans without any collateral or pledging any security. Also, apart from being affordable and providing instant loan approval, personal loans advance many facilities, making them an ideal fit for your financial requirements.
Reasons Why Personal Loans are Better Than Conventional Loan
Hereunder are some significant benefits of personal loans that make them a far better credit option than a traditional loan.
1. High loan Sum
Personal loan providers determine your approved loan amount based on your income, credit history, and repayment capability. Usually, financial lenders extend personal loans of up to INR 25 lakhs, adequate to meet most of your financial obligations.
2. Competitive Prices
Personal loans provide the advantage of affordability in several ways. You not only pick your repayment duration as per your budget, but the loan interest rates of personal loans are further competitive as there is a low-risk factor. Also, personal loans possess lower interest rates than other types of loans prevalent in the market.
3. Flexible Loan Repayment
Personal loan providers extend the flexible loan repayment duration for borrowers. This is an exceptional advantage for the borrowers. It enables them to repay their personal loan sum in EMIs that they prefer as their economic status and repayment capability.
4. Unsecured loan option
Personal loans are usually unsecured loans that do not expect you to pledge an asset as a security. With this unsecured loan, you possess a low risk as your loan sum does not get upheld by any collateral or guarantor.
5. Quick Loan Processing
As personal loans need fewer formalities and documents, they do not demand extended eligibility checks and applicants get instant loan approval in 5 minutes. This can spare you a significant amount of time, which can be vital in time-sensitive circumstances like a medical crisis.
6. Uncompounded Eligibility Criteria
One of the significant benefits of personal loans is their comfortable eligibility criteria compared to other loan types. Also, applicants need a credit score of 750+ and a minimum monthly earning of INR 25000 per month to avail of a personal loan.
7. Simple Documentation Method
Loans are notorious for their massive documentation obligations. However, personal loans hold minimum formalities in terms of paperwork and documents. You only need to verify your identification, address, and earnings with valid documents.
8. Instantaneous Loan Transfer
Getting a personal loan is one of the fastest ways to receive instant funds. This unique loan advantage can be exceptionally convenient during times of crisis, like a medical situation. Under such extreme circumstances, expecting the loan sum disbursal can create difficulties in the entire matter. Hence, a personal loan is the most competitive option for such events, as it provides instant loan approval.
9. Convenience
You can apply for a personal loan right from the convenience and solitude of your laptop or smartphone. Eligibility criteria are easy to meet, and documentation obligations are minimum. The complete process gets completed online, and there is no need to visit the loan lender's office.
10. Credit Booster
Although personal loans are unsecured loans and they hold comfortable eligibility criteria, they are still a transcendent credit booster in various ways. This is because a personal loan provides you with a flexible repayment to help you build a healthy credit score.
Now that you know why personal loans are better than traditional ones, you can readily apply for these loans to accomplish your financial obligations without depending on anyone for your money.