During the fiscal year of 2017-18, the Indian economy witnessed the largest incremental growth in non-goods credits. Personal loans grew by 20.4% between FY17 and FY18. The immense growth can be accredited to the growing availability and popularity of various types of loans in India. Financial institutions offer credit at affordable interest rates and with a host of benefits. A borrower enjoys a range of features when they apply for advances like a personal loan.
A personal loan is a type of unsecured loan. You won’t have to pledge any collateral against the money; a lender offers you a certain amount of advance depending on your credit score and other parameters. An urgent personal loan also does not come with any end-use restrictions, making it ideal to manage any personal expenses and even emergencies.
Here are the top 5 benefits of a personal loan that you should know.
1) You Can Choose a Suitable Tenor
You can select a flexible tenor ranging from 12 to 60 months. It will help you select the best EMI rate to repay the loan according to your capability.
You can use an online EMI calculator to decide a balanced EMI rate and loan tenor.
2) Use It to Consolidate Existing Debts
Such advances have no end-use restrictions. So, you can use an urgent personal loan to consolidate existing debts. Use the funds from one large personal loan to pay off high-interest debts like student loans, credit card debts, etc.
It will help you keep track of payments as you have to pay only one EMI instead of multiple accounts. It will also save money in the long run as personal loan interest rates are generally lower than the debts mentioned above.
3) You Have Access to a Substantial Capital
You can avail up to Rs. 25 Lakh as an urgent personal loan from various lenders. They also offer application approval within only 5 minutes and loan disbursal within 24 hours of document verification. Some financial institutions even offer promotional deals that make the process even more streamlined.
Companies like Bajaj Finserv provide pre-approved offers for personal loans, home loans, business loans, and a range of financial products and services. Such offers simplify the process of availing finance and help you save time.
4) You Can Improve Your Credit Score
An urgent personal loan can help you increase your credit score. Credit bureaus measure the diversity of your debt profile when measuring your credit score. If you only have secured loans like home or car loans, an unsecured personal loan can add variation to your profile, making you more creditworthy and increasing your score.
You will also improve your CIBIL score via debt consolidation. Closing short-term debt accounts like credit card loans will leave a positive mark on your profile. Also, regular repayment of the personal loan will increase your credit score. Your FOIR will also improve once you pay off the entire debt.
The features and benefits of an urgent personal loan make it an ideal financial product to finance a family occasion, higher studies, or even a medical emergency. The convenience makes it the preferred mode of availing financing in today’s market.