What Is a Personal Loan? Explain the Features Of Online Personal Loan

Money doesn’t buy happiness. The statement could be true. However, money can provide convenience and enable you to have the lifestyle of your dreams, whether it is a car you wish to own or a home renovation. Everything requires money. Some people like to spend their savings on such luxurious wants, while some prefer taking loans. If you wish to fulfil any such personal needs, you can also apply for an instant loan

What is a Personal Loan?

Banks and NBFCs provide instant or personal loans to people to fulfil individual needs. These loans are easy to obtain and have a simple eligibility criterion. You can get an online personal loan in a few simple steps to fulfil any personal or medical emergencies. Mentioned below are the eligibility criteria and the documents that are required to apply for this loan:

Eligibility Criteria for taking a persona loan

Following is the list of criteria required to be met to apply for a personal loan:

  • For most lenders, the applicant must be between 21 to 63 years old. However, some lenders offer this loan to people up to 67 years of age as well.
  • The applicant must enjoy a minimum income decided by the lender. 
  • The credit score of the applicant must be 750 or above. 

Documents Required

  • Proof of identity
  • Proof of address
  • Salary slips, bank statements, copy of Form 16, ITR 
  • Proof of service (identity card given by the employer)

Features of Online Personal Loan

Mentioned below are the features and benefits of getting an instant loan:

Paperless loan

The best thing about getting a personal loan online is that it is paperless. All the documentation is done online, and you are required to upload the copies directly to the lender’s website or app. Once you have gathered the required documents and filled out the online application form, you will find the window to upload them on their portal. This paperless procedure makes these loans very convenient to take. Moreover, you do not need to go through the hassle of getting individual photocopies of each document to submit to your lender. 

Low-Interest Rate

The interest rate charged on loan solely depends upon the lender. Banks or NBFCs usually asses the interest rate to be charged on a particular loan based on the financial history of the borrower. If the credit score of a borrower is high, he is more likely to get a lesser interest rate on a loan. On the other hand, if their credit score is low, the lender might increase the interest rate on their loan. However, in today’s competitive market, you will come across lenders providing you with attractive interest rates. With some thorough research of the market, you can find yourself the best deal while taking an instant personal loan online

Fast approval of the loan

Remember old times when people had to take constant updates or visit their lender’s office several times to get a loan approved? Luckily times have changed. Personal loans, especially when taken online, can be fast with approvals. Since the entire procedure is online, it becomes easier to eliminate errors and avoid unnecessary delays in the approval. Once your uploaded documents and the details filled in the application get verified, the approval does not take long. 

Quick release of the loan amount

The top feature of getting personal loans online is the quick disbursal of the loan amount. You get the amount directly transferred to your bank account within a matter of a few hours. After you fill in the application and upload the documents, you are required to wait for the approval of the application. Post the approval, and the loan amount gets transferred to your account without any further questions or delays. This feature of the personal loan makes it the most suitable for emergency monetary requirements such as medical emergencies. 

Repayment tenure options

Taking any loan is a big financial decision. Your repayment tenure tells how long you will be in debt. Getting a few repayment tenures to choose from gives you the flexibility to make financial decisions in the long run. You can opt for a short repayment tenure if your income allows and become debt free early. On the other hand, if you have some other monetary commitments as well during your repayment tenure, you can choose a longer one. Long repayment tenure can take some burden off your shoulders by not making you pay heavy instalments every month. 

No need for collateral

The feature that makes personal loans accessible to a lot of people is that it doesn’t require you to provide collateral. You can take this loan without keeping an asset as a security with the lender. The loan is given to you solely based on your credit history. Your lender decides your financial credibility based on your credit score. Unlike traditional loans, a personal loan can be taken without any collateral involved in the picture. 

Easy suitable EMIs

At the time of applying for a personal loan, your lender provides you with EMI options to choose from. These EMI options also decide how long your repayment tenure is going to be. If you know your budget will not allow you to go hefty on the monthly instalments, you can go easy on the EMIs. However, if you are in a position to pay big EMIs each month, you can be free of debt early. Also, the more considerable the EMI amount, the higher chances of getting a better interest rate. In order to get the best deal on your loan, you should, therefore, pay off a considerable amount as EMI each month if you can. 

Read Also: Know in detail about business analytics

Summary

Whether you apply for an instant loan or a personal need, or a medical emergency, these loans get you access to quick money. Many banks and NBFCs are providing personal loans at attractive interest rates. This money can be used flexibly and be paid back through easy EMIs throughout your repayment tenure. Personal loans can be beneficial for people who are in need of urgent money and need a quick solution. 

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