What are the Pros and Cons of Personal Loans?

Pros and Cons of Personal Loans

What are the Pros and Cons of Personal Loans?

What is personal Loan?
A Personal loan is a loan which you can take in for fulfilling your financial needs without any particular reason to represent in front of the lender. The personal loan doesn’t require any collateral to submit. Compared to other loans personal loan disbursal of loan is very easy. Personal loan you can take for wedding, home renovation, medical expenses, buying a car, paying your credit debts, paying debts from any finance’s, etc.,

The personal loan has low interest rates when compared with the credit card. In personal loan also you can claim for the tax exemption if it’s used for the home renovation or education. Tax can be exempted on the interest you’re paying for the taken loan amount. There are many options to get the amount, but the interest rate is the main factor, which makes the candidates stop from opting loans.

How to get the personal loan at a low interest rate?
Personal loan you can get at low interest rates by maintaining the following:
Excellent credit score
No negative or close accounts
All previous loans are closed or present loans are paying on deadline.
Maintaining not more than two credit cards or bank accounts.
All utility bills paid on time without any delay.
No credit card debts and every debt are pay on time.
Use of credit card very less
Age of credit lines

Why Credit score important?
Credit score is important because it contains the complete details of the history of the transaction you did, accounts you maintained, the credit card you applied, utility bills, finances, your transactions, etc., All this information is collected by the CIBIL from the bank and financial institutions to calculate the credit report of the candidate. So credit report is the first thing which checks by the lenders before processing the bank loan application.

How can one maintain the good credit score?
By paying every debt, finance, not using credit card frequently, paying every utility bill on time and more age of credit lines.

Pros of Personal Loans:
It can be disbursed in a very short span of time compared to other loans.
It doesn’t require any collateral to submit.
It requires a basic document to submit.
Application processing is quick.
No need a specific reason for applying for a personal loan.
No restriction on spending the loan amount.
Tax benefits in case of home renovation or educational purpose.

Cons of Personal loans:
High interest rates as it doesn’t need a collateral to submit, so there is no surety for the lender. So they ask for higher interest rates. But you can avoid this if you maintain a high credit score.
Some lenders don’t allow the prepayment of the personal loan, so you must check with the lender before applying for a personal loan.
The rate of interest for a personal loan depends on the credit score you maintained.

When compared to cons, the personal loan has more pros. So it’s a good option for us when we are in real need of finance. Instead of asking searching here and there and wasting time. But in case if you have gold or land the best option is to submit those as collateral and take a loan instead of taking a personal loan.

If you want to know more about a personal loan and how can you get the personal loan at low interest rates. You can contact us at info@365eloans.com. Our financial advisers are always here to assist you at no cost.