Financially stressful situations are something all of us are familiar with. Whether it is for some last-minute travel plan change or a big wedding party or to complete higher education, money is one common stressor. To deal with this stress, people start looking for assets they can offer as security against a loan.
Ignoring the availability of unsecured loans due to the stigma attached to it. But, not many people take a step back and mull over which type of loan would be beneficial for them. There are numerous benefits of personal loans. The process of personal loan apply is easy and simple. Here are a few advantages of unsecured loans that you can keep in mind during your search for a loan.
List of Benefits of an Unsecured Loan:
- They are Versatile
Lenders don’t ask what you are going to do with the loaned money. You can use the money for anything. This makes unsecured loans much more appealing.
- Decent Interest Rates
The personal loan interest rates can be favorable for you if you have a good credit history and a reliable income. Lower interest rates keep your EMI affordable.
- No Collateral Required
Unsecured loans don’t require you to offer anything as security against a loan. This way, you can keep all your assets in your name and deal with your troubles together.
- Shorter Tenures
The repayment time for unsecured loans is generally shorter which means you will have to pay lesser interest the faster you can pay back the loan.
- Flexible Loan Amount
Unsecured loans don’t have a fixed amount that you can borrow. You can quote your amount, and the lender will disburse the funds to your account once their formalities are complete.
- Quick Disbursal of Loan Amount
Once your loan application is approved by the lender, the loan amount gets disbursed to your account within 24-48 hours. With time, most lenders offer digital processing and minimal paperwork, reducing the pressure on you.
- Simplest Eligibility Criteria
Unsecured or personal loans have simple eligibility criteria that are required to apply for the loan. The criteria include minimum income, age, working experience, CIBIL scores, etc., among others. The criteria differ according to lenders. There are eligibility calculators that can help yo.u make an informed decision regarding your loan.
- Flexibility to choose the tenure
You can choose the loan repayment tenure according to your ability to repay it. The tenures usually go up to 7 years. Longer tenures mean your monthly EMI will be lower and vice versa. You can make this decision after calculating your EMI using an EMI calculator.
- Instant Loan Approvals
You can get instant loan approvals from lenders once you use the online EMI calculators. These calculators ask for your income and the amount you need to borrow and then give you an idea of your interest rates and the EMI amount you will have to pay once the loan amount is disbursed.
- Minimal Document List
Lenders require you to submit some documents along with your applications. These include KYC documents like voter ID, Aadhaar Card, driving license, etc. Along with this, you will have to submit income proofs and account statements for the last couple of years to show the stability of your income.
- Tax Benefit
With proper documents, you may also be able to avail of some tax benefits on your loan. For example, if you use the amount for construction or renovation of your house or even as a down-payment towards a new home, you can avail tax benefits of up to INR 2 lakhs under Section 24B. Under this section, the interest you pay is deductible from your taxable income.
But it is to advise that must check and compare the personal loan interest rates before applying for the loan. Hence, it can’t affect on your pocket.
A versatile personal loan can provide sufficient support for your financial requirements instantly. With features like flexible tenures, competitive interest rates, repayment of EMIs are easier and affordable, making personal loans a great choice to go for, during an emergency.