You can borrow money and fill any financial void by applying for a personal loan. It could range from renovating your home to bearing wedding expenses or financing a vacation. Since these loans are unsecured, there is no collateral involved, and you have the freedom of using them in whichever way you see fit. However, lenders levy an interest rate, and you can use a rate of interest calculator to determine the amount.
Financial institutions make personal loan offers to customers who require financial help. Under this loan, the lender grants a fixed amount of money to the borrower after conducting basic checks. Your income and its source, your credit score, and your debt-to-income ratio are some parameters banks check before approving your loan application.
Attractive features of personal loan offers
Discussed as follows are attractive features that are specific to personal loan offers –
Flexible – Unless specified by the lender, you can use a personal loan for any purpose. Only in rare cases do lenders restrict how to use the loan For example, if you have applied for a personal loan citing a medical emergency, then the lender might insist that the funds are only to pay off the doctor’s bills. Most lenders do not check how you use the funds, thus granting you flexibility.
Absence of collateral – Lenders do not ask for collateral while approving your application for a personal loan. So, you can borrow money without having to put any of your assets under the hammer. However, if you fail to repay in time, the lender might levy an additional charge as a penalty.
Easy to obtain – Among the various types of loans, a personal loan is the easiest. Lenders ask for documents to check your identity, income, and address. After submission, approval can take only a few minutes and you can get the funds within 24 hours*.
Factors that impact personal loan offers
The following factors can affect your handling of the personal loan –
Interest rate – Every time you borrow money, the lender charges an interest rate and adds this to the EMI. Lenders consider various factors related to your financial position and credit history to determine the rate of interest. They also include this figure in the monthly installments. To minimize its impact on your long-term finances, use a rate of interest calculator and work out your finances beforehand.
Tenure – As a borrower, you will need to decide the period over which to repay your loan. In this context, the longer the time is, the lower the EMI and the interest rate. Likewise, repaying over a shorter duration might seem viable but leads to higher EMIs and a higher interest rate.
Processing fee – Lenders charge a processing fee when you borrow money from them. Although this is a one-time charge, the amount varies from one lender to another. Eventually, it is deducted from your loan amount. A strong recommendation is to discuss this aspect with the lender to avoid unpleasant surprises later on.
Terms and conditions – The terms and conditions form an essential part of the personal loan application. Not only does this protect you from hidden charges, but will also prepare you for managing the loan in the future.
Final thoughts
If you need funds to bear an unprecedented expenditure or to get rid of an old debt, consider personal loan offers. The application process is similar to applying for a credit card. The lender will check all your personal and financial information through the documents. So, if you enjoy a good financial standing, this is one of the easiest ways to borrow money.