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Pros & Cons of Personal Loan

PowerPoint Presentation on Pros & Cons of Personal Loan

What is Personal Loan? ď Ź

Personal Loan - Personal loan also known as signature loans or unsecured loans. Personal loan is not secured by collateral. Collateral means something of value like home or car that lender can repossess if you don’t pay the loan amount. The personal loan amount can be used for any personal expenditure such as wedding, vacations,home renovation. It helps to meet your current financial needs

Applying for a Personal Loan ď Ź

ď Ź

It may be easier to get a personal loan from a bank you already have an account with. The bank will probably want to know what you're going to use the money for and may even have a better loan for your needs. One needs to be of a minimum age of 21 years and should have a valid set of documents like ID proof, income proof and residence proof among other documents to avail the loan. To ease the burden of paying off the loan immediately, you may opt for the EMI (Equated Monthly Instalment) facility. The repayment tenure can range from anywhere between 12 to 60 months.

Pros of Personal Loan 

Below are the important pros of personal loans:

No collateral required – Most of the personal loans are unsecured. Therefore, they do not need any collateral.

Multi-purpose loan -Amongst the many advantages, it being a multi-purpose loan is the top-most reason. A personal loan provides flexibility of use. Be it for home improvement, medical reasons, or even covering marriage expenses, it would be the ideal solution. Best way to improve credit score -A personal loan is the best way to improve your credit score. Even though your credit score depends on all your credit activities,it plays the most important role. Negotiation on Interest Rate: Having a good credit score can give you the power to negotiate the interest rate offered. The interest rate majorly depends on your credit score. This is why it is possible to get an easy personal loan with minimal paperwork. Quick disbursal when compared to other forms of credit - It is easy to get quick disbursal on personal loan when you compare to other loans. Therefore, it can be the friend in need in times of financial emergencies.

Cons of Personal Loan 

Below are the cons of personal loans: High-interest rates - Since a personal loan approval is entirely based on your creditworthiness, it, therefore, attracts higher interest rates. However, this can be prevented if you have a good credit score. Strict eligibility criteria - Being an unsecured form of credit, the eligibility criteria is very strict. Generally, a person with a good credit score (700 or above), enough repayment capacity and a good income are eligible. This is why it is always advisable to check your eligibility before applying. Adverse effect on credit score - Just like on-time loan payments are the best way to boost your credit score, a single miss of payment adversely affects your score. Hence, a person must be careful to not miss any payments. A good way to avoid missing payment is if you use an EMI alert reminder.

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Pros & cons of personal loan  

Everyone wants to have a personal loan for so many reasons but most of us don't know about a personal loan, so get to know about it just rea...

Pros & cons of personal loan  

Everyone wants to have a personal loan for so many reasons but most of us don't know about a personal loan, so get to know about it just rea...