Should You Really Go For a Personal Loan?
July 28, 2019
Each one of us has a host of financial commitments to fulfil in our lives. However, it is not always that you have adequate funds to manage all your expenses. Is taking a Personal Loan a good option in such scenarios? Read this post to find out.
Life is unpredictable. Combined with the increasing cost of living, it often gets very cahallenging for most of the people to meet all of their financial responsibilities. Taking a Personal Loan can be a smart decision in such scenarios. But while people are generally comfortable when taking other types of loans such as a Home Loan or a Car Loan, Personal Loans are mostly avoided. Are Personal Loans really a smart solution for managing your finances? Let us have a look at some of the pros and cons to make a better decision.
Pros of Taking a Personal Loan
1. Multipurpose Loan: Unlike other types of loans like a Home Loan or Education Loan, you are free to use a Personal Loan just the way you want. Once the loan is approved, there are no limitations on how you can use the loan money. From medical emergencies, family vacation, or purchasing the latest gadgets, you can use the money for any reason of your choice.
2. Minimum Eligibility: Gone are the days when only a selected few were eligible for taking a Personal Loan. The Personal Loan eligibility requirements have fallen considerably in the last few years to make it more accessible. If you have a decent job with a stable income, you’d mostly be eligible for the loan.
3. Flexible Repayment: Banks now offer Personal Loans of up to Rs 20 lakh for up to 5 years. As a result, you can easily repay the loan in monthly instalments. Even the Personal Loan interest rate is now highly competitive, making it more affordable for the borrowers.
Cons of taking a Personal Loan
1. Loan Misuse: As Personal Loans are now so readily available and there is no limitation on how the money can be used, many people end up misusing the loan. However, this is more of a personal reason and not a disadvantage of taking a Personal Loan. Borrow responsibly and repay on time to make the best use of such loan offerings.
2. High Credit Score Required: As it is an unsecured loan, the Personal Loan requirements with regards to the credit score are higher as compared to secured loans like car loans. This is a measure taken by banks to make sure only creditworthy individuals can receive a Personal Loan. However, if you have an excellent credit repayment history, you'd meet the credit score requirements of most lenders.
What Should You Do?
As you can see, there are pros and cons of taking a Personal Loan. However, the advantages are far more beneficial and effortlessly overcome the few disadvantages.
Understand your requirements and give special attention to the points discussed in this post to make a smart decision. Select a reputed bank if you want to go ahead with the loan to actually experience the convenience and benefits of taking a Personal Loan.
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