An unsecured personal loan is a loan that you can get from a bank, a non-bank financial institution or another financial institution to fund any of your personal needs. Personal loans have been available for several decades, but they have only recently grown increasingly popular. Several studies have found that the number of personal loan applications has increased over the last decade, and there are several explanations for this. An instant personal loan, after all, requires no collateral, is available right away, and has low-interest rates. Furthermore, they are quick and simple to obtain, and you are free to use the funds in any way you see fit. Let’s take a look at the top ten reasons why they’re becoming increasingly popular.
Easy availability online
You can apply for a personal loan online with a number of banks, NBFCs, and online lenders. Furthermore, most lending apps and websites present you with the loan amount you are entitled to borrow based on your monthly income when you apply for a loan online. You can also submit your documents via the internet. After your loan application is granted, the funds are sent immediately into your bank account after the processing charge is deducted.
Quick loan application and approval
From application to disbursement, the entire process takes only minutes. You will be able to obtain the funds you desire without ever having to visit the lender. Furthermore, the fast loan approval and disbursement allow you to quickly and conveniently meet your emergency demands.
You may also quickly download the personal loan app from the Google Play Store, register, and apply for an online loan. Your papers will be uploaded in a matter of minutes. When your loan application is approved, the funds are immediately transferred to your account.
Lots of options are available
Because there are so many personal loan lenders, you have a good variety of options to choose from. You can shop around for lenders online and pick the one that best fits your needs and budget. Compare lenders by loan size, interest rate, repayment periods, eligibility requirements, documentation requirements, customer service, and other factors. Apply to just one lender to see if you have a good probability of being approved.
Because personal loans are unsecured, you won’t have to submit a lot of paperwork. For personal loans, banks, financial institutions, and other lenders do not require as much verification as they do for home loans. Personal loans appeal to a large number of people due to their low documentation requirements. To apply for a personal loan, you only need to provide verification of your address, identification, and income.
Availability of user-friendly apps for online application
The online lending apps are created with your needs in mind. Signup, loan application, EMI tracking, and other similar activities make applying for a loan via a mobile application easier. Furthermore, instant lending applications eliminate the requirement to speak with a single person in order to obtain a loan.
No collateral is required
The popularity of personal loans arises from the fact that they are unsecured. To get one, you don’t have to put up any collateral or make any guarantees. Typical collateral, such as property or funds, can be stressful, but not when applying for personal credit or a loan.
No restrictions on end usage
One of the most significant benefits of taking out a personal loan is that the borrowers are free to use the money any way they want. While other loans, such as home loans, must be used for a certain reason, a personal loan can be used for any purpose.
A personal loan, unlike other loan kinds, can be used to fund home renovations, travel expenses, study abroad, wedding planning, medical emergencies, debt reduction, and more. As a result, you have complete freedom to use your personal loan to fund any planned or unanticipated project.
Flexible repayment tenure
The repayment period for instant personal loans often spans from three to sixty months. You have complete freedom to select the duration that best matches your needs. However, you should be aware that the interest rates charged on personal loans with longer terms are substantially greater than those charged on loans with shorter terms.
An instant personal loan is simple to repay. Loan repayment is a breeze thanks to features like flexible repayment terms and low EMIs. Furthermore, taking out an instant personal loan and repaying it on time with EMIs improves your credit score.
Improves credit score
A personal loan is an excellent strategy to diversify your credit profile. If you take out a personal loan and pay off the EMIs on time, it can help you enhance your credit score. Because your credit score is an important factor that lenders consider when determining your creditworthiness. You can use a personal loan to enhance your credit score and gain access to more loans in the future.
The reasons mentioned above are only a handful of the many reasons why personal loans are gaining popularity. So, if you need additional finances to achieve a short-term or long-term personal goal, you now know which type of loan to consider.