Personal loans in India have become quite common. Clearly, people have seen the advantages that personal loans have to offer. Yet, there is also a large section of society which is yet to take out personal loans in India in spite of the fact that they are eligible for them.
Because so many people are missing out on the advantages of personal loans, we thought we would share some more information about them. This article highlights some truly priceless advantages of personal loans in India.
1. No Need to Define a Purpose
The very nature of personal loans is defined in their name; they are for personal use. There is no need to specify a purpose for which the loan is sought. In other words, it is a loan that can be used for meeting a wide range of personal needs.
This flexibility proves to be absolutely priceless. Otherwise, if we look at loans like home loans or auto loans, they can only be availed for the items in question. With personal loans, you can use the money on anything you would life. The options are truly endless.
2. Wide Range of Amounts
Another wonderful advantage of personal loans is the fact that they are available for a wide range of amounts. This includes relatively small sums of money, say 25,000 Rupees. This amount can also be much, much larger.
For many folks, even such sums in an emergency can prove invaluable. Moreover, by lending suitable sums that are easily repayable by the borrower, lending entities try and ensure that borrowers do not fall into a perpetual debt trap.
3. Flexible Repayment Terms
With personal loans, the repayment terms are relatively flexible. Even for reasonably smaller loans, the repayment tenure can range from 3 to 5 years, completely depending on the comfort of the borrower.
In fact, at the time of receiving the personal loan, borrowers can candidly discuss personal loan repayment terms with lenders. That way, both can arrive at terms that are mutually agreeable and comfortable.
4. Personal Loans in India are Ideal for Repaying Other Loans
Personal loans in India are especially very well suited for repaying other, possibly costlier loans.
For instance, if you have a large outstanding debt on your credit card, which you are finding rather difficult to repay, you can easily opt for a personal loan. You can use the funds from the loan to pay off your credit card debt in full.
Similarly, there are other loans that are invariably costlier than personal loans. For example, many in our country have a tendency to borrow from private moneylenders who often have unrealistic repayment terms. These terms include really nasty consequences in the event of default.
Such loans are actually best avoided. Yet, if you have already made the mistake of availing such a loan, you are better off taking out a personal loan and settling the loan from a private moneylender as soon as possible.
5. Improvement in Creditworthiness
Personal loans are an ideal instrument to bring about improvement in overall creditworthiness. This is especially thanks to an aspect we highlighted above – the fact that you can avail just about any sum of money, including really small ones, in line with your requirements.
Now, a smaller sum of money borrowed is quite likely to be easily repayable. As you diligently repay your personal loan, however small or big the amount in question, credit agencies will note your financial discipline and accordingly improve your overall credit (CIBIL) score.
Therefore, this is one major advantage of personal loans which should not be overlooked. In fact, if you do not really have a credit history as such and are looking to build one, personal loans would be an ideal platform for doing so.
Personal loans in India clearly bring forth an entire plethora of priceless advantages. Taking out a loan is a big step, but they don’t have to be scary! Contrarily, personal loans can be a huge help in improving a variety of situations you may find yourself in. When you are in need financially, remember these benefits.