What are the Advantages of Personal Loan?

Hi Sohail, I saw you asking about the personal loan benefits and can share them with you here. I took a personal loan for my wedding last year and did so after understanding the complete benefits it has to offer.

What are the Advantages of a Personal Loan?

• You have the option to choose the loan duration according to your repayment capacity. The tenure goes up to 5 years. You have the control in your hands to choose the repayment period.  

• The application process is simpler as the documents needed aren’t much.

• Some financial institutions also provide flexi benefits, where you can borrow from your loan limit and part prepay as per your need at no extra cost. 

So, these are some of the benefits of personal loan. I recommend you check the other answer on this question to know the rest of the benefits. I hope this helps you.

Last year, my sister got married. She wanted to take a loan from family members to finance her marriage. However, I suggested opting for a personal loan. According to me, there are several benefits of a personal loan. A personal loan is convenient because it can be quickly disbursed with little to no paperwork and can be repaid over time in manageable installments.

What are the Advantages of Personal Loan?

My sister availed of a personal loan from HDFC Bank. I can share the benefits of taking out a personal loan;

• No Limitations on the Use of the Fund:

She was able to use the money for anything, unlike other loan types like auto or home loans, which are intended to be used for particular purposes. Unless one uses the money for any illicit purchases or other illegal activity, the lenders usually don't have any restrictions on how you use the money in the end. 

• Easy loan processing: 

It is very easy to apply for a personal loan in HDFC or any other bank. There are several modes, via an ATM, in person at any closest branch, online, or through NetBanking. There is less documentation required and a quick application process.

• Instant disbursal: 

Being a customer of HDFC Bank, she was able to receive a personal loan in 10 seconds. For other customers, this can be done in four hours.

• No requirement to offer collateral to secure the loan: 

As Personal loans are unsecured loans, she was able to obtain one without pledging assets like stocks or your house as security.

• Constant Interest Rate:

In general, personal loans are offered by the majority of Indian lenders at fixed interest rates. For my sister, the interest remained the same regardless of the tenure that she selected, so she was not concerned about interest rate fluctuations brought on by shifting market conditions.

• Easy documentation: 

Compared to most other loans, a personal loan requires far less paperwork and takes much less time to process. The following paperwork was required by her to obtain a loan: 

1. Proof of identity

2. Proof of address

3. Proof of income. 

• Pocket-friendly repayment: 

Easy installments or EMIs are available to pay back a personal loan in a way that fits the budget. Payment terms are typically adjustable, which allows her to select a tenure that best suits her needs. HDFC Bank offered her EMIs starting at Rs 2,162 per Lakh with terms ranging from 12 to 60 months.

It is because of all these benefits of a personal loan, that I believe taking out a personal loan is an excellent way to raise funds for an immediate financial crisis.

Read More: