The Pros and Cons of Personal Loan

Jun 2
09:55

2015

Harshita Chopra

Harshita Chopra

  • Share this article on Facebook
  • Share this article on Twitter
  • Share this article on Linkedin

A personal loan is one of the best options to avail money in time of need, and help to get money for events like a marriage, for planning a vacation or even for a medical emergency. Although, it is helpful but it also has some disadvantages.

mediaimage

A personal loan is a very healthy option if you don’t have the money to fulfill your personal needs. It is the alternative to get funds for your daughter’s wedding,The Pros and Cons of Personal Loan Articles your dream vacation or sometimes even a medical emergency. There are many advantages of a personal loan, and so it is availed so widely. Reports show that RBI had disbursed Rs. 86000 Cr in the Last Fiscal Year. This number tells its importance.

A personal loan is an unsecured loan and should only be availed if you have nothing to keep as an asset or collateral. It is a multi-purpose loan and can be availed without telling because taking it. If you have some investment for a long period and you need money urgently, then you should never liquidate your FDs. Rather you should go for a personal loan to get your money. Another feature of a personal Loan is that it can be availed easily and the turnaround time is 24 hours.  The documentation required is also easy and simple. Banks and the NBFCs just require ID Proof, your bank statements, and your address proof to check your Eligibility to provide you a loan. Also, the EMI are calculated based on your income and savings. There are schemes in the market when you can pay your EMIs in flexible way. So, one of the advantages of a personal loan is that it provides flexibility to the customer’s pocket. A personal loan is thus a prominent way to get money when you require.

Apart from the above features, there are many disadvantages of personal loan as well. The Rate of Interest of Personal Loan is normally higher than that of other types of secured loans such as Loan against Property, Gold Loan, Loan against Shares, etc. Also, the turnaround time is a little more than the Gold Loan. So, if you are paying the EMIs, then you have to be very careful as you may be paying higher than any other alternative for a personal loan.

So these are the basic features and should be kept in mind if you are planning to shop for a personal loan.

Categories: