Personal Loans are availed by people who are in urgent need of cash. Most of the time, the motive behind availing a Personal Loan is buying a vehicle or a home appliance, funding a marriage, or arranging cash for a house renovation.
However, as easy as it may sound, Personal Loans are provided by banks and NBFCs after a strict analysis of your credit history. This is because a Personal Loan is an unsecured debt and you don’t have to submit any collateral to secure it. So, the only way financial institutions can ascertain that their money will be safe is by scrutinising your past debt repayment track record. You can avoid rejection by checking your loan eligibility through a loan eligibility calculator before approaching a financial institution.
When you apply for a Personal Loan, banks and NBFCs will take some time to approve and sanction your loan. During this time, they will make use of a Personal loan eligibility calculator to determine your creditworthiness. If the results are satisfactory, your loan will be sanctioned and the amount will be credited to the savings bank account you have mentioned in the loan application form.
Advantages of Personal Loans
No Agents Involved: To avail a Personal Loan, you don’t have to approach any agent or middlemen. All you have to do is directly approach a bank or NBFC of your choice, file the application, and wait for them to get back to you.
No Guarantor, Collateral, or Security Required: Personal Loans are granted only on the basis of a person’s credit-worthiness. You don’t have to submit any collateral to secure a Personal Loan. The financial institution you have approached will take a look at your CIBIL score to determine your eligibility for the loan.
Ease of Repayment: Generally, banks and NBFCs provide Personal Loans for a duration of 12-60 months. But, you can decide the tenure depending on your repayment capacity. The monthly EMIs are fixed but if you come across extra cash, you can prepay the loan amount.
Offers and Schemes: Several banks and NBFCs keep announcing special offers and schemes for Personal Loan account holders. So, if you are on the lookout for another loan, these offers might come handy.
Hassle-Free Paperwork: Since you don’t have to pay any collateral, the paperwork in minimal. Also, if you’re applying online, the documentation process becomes, even more, simpler.
Can be Used for Anything: While availing a Personal Loan, you don’t have to specify the cause to bank or NBFC officials. Once the amount gets credited to your account, you are free to use it in any way you want.
Investing your Personal Loan to Make Profits
You can use the money gained from a Personal Loan for making investments. By investing in different ventures, you’ll ensure that your future is financially secure. For instance, if an emergency crops up in the future, you’ll be able to sort it out by the money earned from these investments.
Invest in your Business: These days banks and NBFCs provide Personal Loans to entrepreneurs to help them grow their business. This can be helpful because procuring a Business Loan is way tougher than availing a Personal Loan.
Invest in real Estate: Investing in a house can help you reap massive profits in the future. Property prices are soaring and it won’t be coming down for a long period. Besides, owning a house adds a tangible property to your investment portfolio, which is an achievement in itself.
Invest in the Stock Market: Using a Personal Loan to invest in the stock market will be a good idea as stocks and shares can fetch you good profits. But, you should also keep in mind that stock markets are extremely volatile and it can swing in any direction. Also, there’s no guarantee on the return-on-investment, making it a bit risky.
Invest in Mutual Funds: In Mutual Funds, money is pooled from different investors and invested in a variety of assets. The profit you earn from Mutual Funds depends on how the assets have performed in the market. Therefore, you should be very careful about selecting assets while investing in Mutual Funds.
A Personal Loan can help you achieve financial freedom by sorting all your monetary issues. Whether you want to fund your child’s education or get out of another debt, a Personal Loan will help you solve all these issues and more. So, if you have been worrying about funds lately, take out a Personal Loan and say goodbye to financial stress.
I'm Anjali Dixit, a passionate blogger, I enjoy my work and believe there is always a lot to discover in the world of Internet. A foodie and love reading books. In my free time, I like to dive into various activities such as discovering something new, traveling to new places and hanging out with my friends.