A personal loan is a pool of cash that boons you to fulfil your needs and aid you during emergency spending. Though the personal loan is a liability, paying off the dues has become easier than before. This is because of the calculation of the monthly payments in advance benefits in effortless repayments. The process of automated EMIs getting deducted every month keeps a follow-up of repayments made & keeps you away from the defaulter’s list.
As we know every coin has two sides, and it’s important to understand both sides for your benefit. Similarly, a personal loan also consists of two sides. We would like you to be aware of and acknowledge both.
Reasons why your personal loan is a good loan?
1.Multi-Purpose Use: One major advantage of a personal loan is that it allows you to use it wherever you want to use it without any restriction on any specific purpose.
2.Enough Payback Time: The time for repayment has healthy and flexible tenures which allow you to repay the debt on time and hassle-free.
3.Online Registration: The online registration process is fast and reliable which has eliminated excessive time consumption and saves the tension of excessive paperwork.
4.Spare From Collateral: Even if you don’t have any assets or security to yield against the loan can also apply for personal loans smoothly. This collateral-free feature makes it easy for lenders to sanction personal loans instantly.
But where there are pros, there are always a few cons involved. It is very important for you to be aware and well informed about all of them. This gives you an upper hand before applying for a personal loan:
1.High-Interest Rate: If you or any borrower has a bad credit score then your are tend to be charged a higher rate of interest. We always suggest you keep a good credit score and not apply for unnecessary loans if not required.
2.Personal Loan Charges: Many personal loans come with a processing fee which is usually above the interest rate i.e between 1% to 6% of the credit borrowed. It’s better to settle this fee in the initial stage of borrowing a loan rather than to pile it up for future instalments.
3.Prepayment Charges: Many lending firms tend to apply a penalty amount just in case the loan is not cleared by you before the tenure. The purpose of this penalty charge is to balance the interest amount which the firm couldn’t earn due to the failure of repayments on time.
4.Scam Liability: Last but not the least & the most vital one. Beware and be aware of fraud & fake financial companies tempting you to apply for low-rate personal loans. By trusting such scammers you’re putting your personal information & identity at stake.
Long things short, it is important for every individual to be well informed about all the pros and cons before applying for a personal loan so that they don’t face future financial issues and are empowered rather than becoming a financial liability.
