A personal loan is borrowed money that you can use for debt consolidation, emergency spending, major purchases, vacation expenses, and more. The loan is paid in the form of monthly installments over a period which is usually decided by the borrower.
How does the personal loan work?
A personal loan is an unsecured loan, so you don’t need to mortgage your house or have other collateral to get the money. Most personal loans offered by banks have a fixed interest rate, which means that you will pay the same EMI each month. If you get a personal loan approved, the fund will be deposited into your bank account within a day or two. In some cases, it may take a few hours for the funds to be credited to your account.
Should you apply for a personal loan?
A personal loan is a good option for those who need quick cash to pay for an unwanted or large expense. Since the interest rate on a personal loan is lower than on a credit card, this is a good option if you have a high credit score. apply for a personal loan, weigh the pros and cons. You don’t have to go into debt after taking out a loan, so be prepared for the monthly IMEs. If you think your monthly budget will be deeply impacted by a personal loan, explore other options for getting emergency funds.
Why prefer a personal loan to other loans?
There are many financing options, from credit cards to home equity loans. So, why choose a personal loan over another? The reason is that the interest rate for a personal loan is lower than that of a credit card and the financing is faster than that of a home equity loan. Another reason for choosing a personal loan is the lack of collateral, which makes this type of loan less expensive. risky than mortgaging your vehicle, your house or your savings account.
Apply for a personal loan
The first step in applying for a personal loan is to compare the interest rates of different lenders. Check online lenders, credit unions, and other banks for their interest rates. If you want to stay away from all that hassle, look for a online personal loan. IndusInd Bank, for example, offers personal loans applicable online and 100% paperless. You can complete their loan application online, submit a verification document, and if approved, the amount will be transferred to your account within a few hours or a day.
The bottom line
There can be many reasons to apply for a personal loan, but remember that it needs to be paid off. You borrow money to organize this wedding or consolidate debts or take a trip abroad, which must be paid back with interest. So, you have to use the loan amount responsibly.