3 Money – Making Reasons to Get a Personal Loan

March 21, 2018 | Author: | Posted in Finance

Often, in life, there are some things and some situations where we fall short on funds, and we have no other option than taking a help of an external finance. In such situations, we often turn to the banks for a Personal Loan.

While most people condemn the idea of taking a loan from the lenders, as in their opinion, loans can be a headache and can trouble in the later period. Such a notion can be wrong as you need to choose the right type of loan for satisfying your needs, and you don’t need a huge amount of loans for small needs. In such a situation, you can apply for a Loan but first, you need to understand Personal Loans.

What is a Personal Loan?

Personal Loans are one of the lending products offered by the financial institutions and NBFCs. They are small to mid-size loans which provide loan amount ranging from INR 50,000 to INR 25 lakhs.

Benefits of a Personal Loan

A Personal Loan can be availed from any lender or any financial institution. Before applying, you need to know about the benefits of Personal Loan.

 

  • Collateral: Personal Loans are unsecured loans, hence you don’t need to offer security interim for the approval of the loan.
  • Faster Approval: Personal Loans are easy to avail and can get approved within 72 hours.
  • Tenor: The tenors for Personal Loans are comparatively lower than another loan; as they have a small amount of money involved, the lenders provide shorter tenors for the repayment

 

Eligibility Criteria for Personal Loans

While applying for Personal Loans you need to consider the eligibility criteria for Personal Loans set by the lenders.

 

  • Income: As there is no security interim involved, the lenders completely rely on the income of the applicant. To get your Personal Loan approved you need to meet the monthly income requirements set by the lenders.
  • Credit Score: The credit score is the most important part of a loan approval. The lenders check the credit score of the applicant for the loan approval. You need to have a credit score of at least 750 points to get your loan approved.
  • Employment History: The lenders often refer to the employment history of the applicant for the loan approval. You need to have a stable employment history of at least 3 years to get your loan approved.

 

With the above-mentioned points, it is easy to get an overview of a Personal Loan, but Personal Loans can be used as money making tools and money saving tools too. Here are the top 3 ways you can use Personal Loans for money making or saving:

Debt Consolidation: Debt consolidation means taking a loan to pay your various debts or combining your debts into one. A Personal Loan can be used to consolidate debts as in Personal Loans the lenders are very flexible in terms of the usage of loans.

Education Expenses: Education expenses are a bit higher than before. Nowadays, studying in a reputed institution can cost you a huge sum of money, while it might not be possible for some people to afford such costly education on the basis of their savings. You can pay for the education by availing a Personal Loan This education can then get you a much better and high-paying job and set up your career.

Financing Your Business: If you are planning on expanding your business or buying new equipment; shortage of finance can be a major barrier. In such situations, you can apply for a Personal Loan which can help you finance your business.

A Personal Loan can be a push to your career or business, hence helping you flourish and grow.  Due to the flexibility of the purpose in Personal Loans, it is easier to allocate the money and even improve your financial conditions.

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About Author
Anuj is a finance enthusiast, advisor and writer with an overall 10 years of experience. He has been associated with the top financial industry. Currently he is living in Mumbai

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Financial consultant in India

This author has published 3 articles so far.

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