To finance any of your personal needs, you can obtain an unsecured personal loan from a bank, a non-bank financial institution, or another financial institution. Although personal loans have been available in India for many years, their popularity has only recently increased. There are numerous reasons why there have been more personal loan applications in the previous ten years, according to numerous research. After all, a personal loan has cheap interest rates, is immediately available, and requires no collateral. You might employ the dollars however you see fit, and they are moreover quick and uncomplicated to obtain.
Here are the top ten explanations for why they’re gaining popularity.
Loan applications are approved quickly.
Traditional banks had a bad reputation for delaying loan approvals. The final decision on whether to approve or deny your loan took many days. On the other hand, filling out an online loan application only takes a couple of minutes. If all goes according to plan, you might get your approval in as little as 30 minutes.
From application to disbursement, the process is completed in a matter of minutes. You won’t ever need to go to the lender in order to get the money you need. Additionally, the swift loan approval and disbursement enable you to conveniently and quickly take care of your urgent demands.
Simple accessibility Online
You can apply for a loan online through the websites or applications offered by a number of NBFCs. You can also verify your documents online without uploading or submitting them. Upon approval, the loan money is immediately deposited into your bank account.
No security is needed.
The fact that personal loans don’t demand collateral is one of the main factors contributing to their increased popularity in India. When making an application for an unsecured personal loan, you are not required to provide any security, collateral, or guarantors. With expensive debts, like mortgages, that isn’t the case. Our credit score is one of the most important things that banks look at.
There are numerous choices.
There are a lot of personal loan lenders in India, giving you a good selection of possibilities. You can compare lenders online and choose the one that best suits your requirements and financial situation. Compare lenders based on loan amounts, interest rates, repayment schedules, eligibility standards, paperwork needs, customer service, and other variables. When you have the highest chance of being accepted, submit an application to one lender.
very little documentation
A small number of documents are not required when you apply for an unsecured personal loan. Compared to business and home loans, personal loans have far fewer documentation requirements. People are lured to them because they need no paperwork.
Improve credit rating
A personal loan is a great way to broaden the scope of your credit history. Your credit score might be raised if you obtain a personal loan and repay the EMIs on schedule. You can utilise a personal loan to raise your credit score and gain access to more loans in the future because your credit score is a crucial component that lenders take into account when deciding your creditworthiness.
Eligibility requirements
Simple and fundamental eligibility criteria apply to personal loans.
- The eligibility age range is between 21 and 60.
- The candidate must be a citizen of India.
- You must be a salaried employee with a monthly salary of at least 25,000 dollars.
- You must have worked for your present job for at least 6 months and have a total of at least 12 months of work experience
Flexible repayment tenure
Personal loans include repayment terms ranging from 12 to 60 months. You can select the repayment period that is most convenient for you. However, keep in mind that the interest expense for a longer loan term is much more than for a shorter one. As a result, personal loan repayment is made much easier with flexible repayment alternatives. You can use a personal loan EMI calculator to calculate your payments and choose the loan term that best suits your needs.
Without end-use limitations
The freedom to utilize the money any way you like is one of the most important advantages of getting a personal loan. A personal loan can be used for any purpose, unlike other loans, like mortgage loans, which have specific uses only.
Contrary to other loan types, a personal loan can be used to pay for a variety of needs, including home improvements, travel, study abroad, wedding planning, unexpected medical costs, debt consolidation, and more. As a result, you are free to use your loan to finance any anticipated or unforeseen project.
What Loan Is the Most Suitable?
A loan against the PPF or an online personal loan are two popular solutions for handling cash flow issues in an emergency. These loans can be utilised for any purpose the borrower so chooses. Although a personal loan and a loan against PPF can both be used to meet any of your needs, there are a few important distinctions to take into account when weighing your options. Let’s compare a PPF loan with an online personal loan to show the differences.
Loan Quantity:
A loan against PPF can only be used to borrow up to 25% of the amount deposited. The maximum loan amount you can receive with a deposit of 1,000,000 is 25,000. However, if you apply for a personal loan online, the maximum amount you can borrow depends on your capacity to repay the loan and your credit score and might be up to $25,000*. A personal loan eligibility calculator will help you determine how much you are eligible to borrow.
Lend Term:
The terms of repayment for each form of loan are different. A loan against a PPF has a maximum loan period of only three years, but a personal loan has a maximum lending length of five years. Therefore, a shorter loan term would result in a higher EMI. A higher EMI will be felt by all borrowers as a burden.
Rate of Interest:
The interest rate on a loan against PPF is 2% greater than the interest rate offered by the bank on the PPF balance if you repay the loan amount within three years. The interest rate on your PPF debt will rise to 6% more than the existing rate if you are unable to repay the loan within three years. The interest rate charged on the PPF balance increases by 6% from the current rate. This is typically a better offer in comparison to personal loan interest rates, which begin at 11.99 percent annually. Using a personal loan calculator, we can figure out the interest rates for personal loans.
Processing Period
A loan against your PPF might be a better choice if you need money right now compared to an online personal loan, which normally disburses money after final approval in 30 to 24 hours*.
Accessibility and Frequency of Borrowing:
Only once each fiscal year may a loan be taken out against a PPF. Even if your previous loan has been fully repaid, you are not permitted to obtain a second PPF loan during the same fiscal year. On the other hand, a personal loan secured online is special. If your lender is ready to lend to you and you meet the eligibility standards, you may take out personal loans on a number of occasions throughout the course of the year.
