Availing of a personal loan is one of the easiest ways for an individual to access some additional funds. Whether an emergency or a planned expense, a personal loan can help you easily get through your financial need.
In fact, you can even use the money from a personal loan for education within India and abroad or to pay for a wedding for your family. That’s not all. There are plenty of advantages that you get to enjoy by taking out a personal loan. Here’s a closer look at the top 5 benefits.
1. You Don’t Have to Put Up Any Collateral
One of the major benefits of taking a personal loan is that you won’t have to pledge any asset as collateral to secure it. This is primarily due to the nature of the loan. A personal loan is generally unsecured in nature. So, even individuals who don’t have any assets to begin with, can avail it with ease.
2. You Get to Build Your Credit History and Increase Your Credit Score
Individuals who have never availed of a credit facility tend to have no credit history and consequently no credit score as well. This can prove to be very disadvantageous during the time of a loan application since lenders won’t be able to access your credit worthiness. However, by taking out a personal loan and repaying all of its EMIs on time without fail, you not only create a credit history but can also boost your credit score.
3. You Can Get a Personal Loan Within a Very Short Period Of Time
Applying for a loan from your preferred bank or financial institution is no longer a cumbersome process. You can now apply for a personal loan within just a few minutes online. Many lenders process your application and disburse the loan to your account within 24 hours as long as you have a stellar credit score and a long credit history.
4. You Can Use a Personal Loan for Various Purposes
Many secured loans come with certain restrictions. For instance, a home loan can only be used to purchase or construct a house, whereas an auto loan can only be used to purchase an automobile.
On the other hand, a personal loan has no such restrictions whatsoever. As we saw previously, you can use a personal loan for education, travel, purchasing your favorite gadget, and more.
5. You Can Avail a Personal Loan Top-Up
Another major advantage you get to enjoy with a personal loan is that you can avail of a top-up loan if you need some additional funds in the future. However, to avail of a personal loan top up, it helps if you have a good banking relationship with your lending bank.
You also need to have repaid your existing loan’s EMIs promptly over a certain stipulated time period and should have repaid a certain portion of the loan without any delays or missed payments.
Conclusion
With so many advantages, a personal loan sounds like the perfect option to fulfill your funding requirements, doesn’t it? That said, before applying for one, always remember to choose the right lender who offers a lower interest rate. This way, you can reduce your financial burden significantly.
