Today in this fast paced life, everyone needed money almost to meet every kind of needs. People do several things to earn money so, that they never any kind of money related issues and at least fulfill their daily needs. However, It is not possible for every person in this world to have sufficient money. Sooner or later, they will definitely face a situation where they will be short of required money. Thus to save people from facing these situations, personal loans have been conceptualized by different banks and private institutions.
Personal Loan is the loan borrowed to meet personal requirements. These loans do not need to offer any good in order to secure it. That money will be given only on the basis of an analysis made about the papers brought by the client, and on his/her eligibility for such a loan, by the loan officers. Nowadays, a lot companies are taking advantages of the personal situation with personal loan because of the financial recession. The interest rates are also quite reasonable and people often take a personal loan for purchasing purposes.
However, before you run out to get a personal loan, it is essential for you to understand the advantages and disadvantages of personal loan, in order to make an informed decision.
Advantages of Personal Loan
Getting a personal loan is an easy and convenient task than getting other loans. Almost all banks and financial institutions offered personal loans at very reasonable interest rate.
To get a personal loan, you do not need to approach a middleman or an agent. Hence, this avoids unnecessary delays and expenses.
This is an unsecured loan; there is no collateral security required in order to get this loan. That only required your ability to pay back the money.
It is time saving and quick process, as personal loans are available without any security and guarantee.
Once your amount is credited, It is at your discretion to decide what you have to do with the money because personal loan is all-purpose loan.
It does not involve a lot of paperwork, as none of your property is mortgaged. It also not require verification of any assets and proofs.
Number of banks and financial institutions offer special schemes and interest rate to make it valuable.
Disadvantages of Personal Loan
There are strict guidelines and qualification criteria involved in personal loan, vary from one bank to the other and the lenders. It is not possible for everyone to get it.
Only a person with good credit history, can get a personal loan. No lender would want a bad debt for the amount he lends.
It is compulsory for you to have a bank account if you wish to advantage a personal loan. Not essentially with the bank you are applying for.
As it is an unsecured loan, the risk is fairly high for the lender because there is no collateral security or guarantee with them.