An instant personal loan can help you address a range of expenses, be it funding your child’s higher education, consolidating debts or even financing a medical emergency. The collateral-free nature of the loan and hassle-free application process make it a convenient financing option. However, its recommended that you exercise prudence when you take any loan, including a personal loan. Despite its beneficial features, there are a few downsides to availing a personal loan. For instance, since it’s unsecured, it carries a higher cost of borrowing.
To know if the solution is a right fit for you, read on to know the advantages and disadvantages of an instant personal loan.
Advantages of Availing an Instant Personal Loan
- Instant Approval
Applying for a loan can be a tiresome and a long-drawn process that requires filling out dozens of forms and producing numerous documents. However, the same cannot be said about an instant personal loan. With lenders like Bajaj Finserv, you can easily apply for a personal loan online and get approval within 5 minutes. Moreover, you benefit from 24-hour disbursal post approval too.
- High Loan Amount
On meeting the eligibility criteria and providing supporting documents, you get access to ample financing. While this amount depends on the lender, with a flawless credit report and a high CIBIL score, you stand to obtain a substantial instant loan. For example, with Bajaj Finserv, you can get up to Rs.25 lakh in no time at all.
- Collateral Free Nature
Most loans require you to pledge collateral and this can prove to be a significant barrier to availing finance. However, a personal loan requires no security and so, you are saved from the hassle of identifying a valuable asset.
- Unrestricted Use
Unlike other loans, an instant personal loan places no restrictions on its end usage. So, you can use this loan to finance a wedding, go on vacation, refurbish your home, buy a used car or simply bring home new electronic appliances.
Disadvantages of Availing An Instant Personal Loan
- High Personal Loan Interest Rates
Since personal loans are not backed by collateral, the interest rate can be high. A very high rate can cause repayment to become a burden. However, interest rates on personal loan are subjective to lenders and you can secure a competitive rate if you pick the right lender and have an excellent credit report and a steady income.
- Restrictive Part Pre-Payment Terms
While you have the option of a flexible tenor, lenders generally disapprove of any changes made to the EMI schedule. So, in most cases, you won’t be able to part-prepay or foreclose the loan before the tenor is over. If you are able to, then you will probably have to pay a 2-4% fee for the facility.
A smart way to overcome this is to pick Bajaj Finserv Flexi Loan facility. It allows you to withdraw multiple times from your approved sanction. You can do this without submitting fresh applications or paying extra charges. Additionally, interest is levied only on the withdrawn amount. Best of all, you can make part-prepayments or foreclose the loan without paying any extra charges.
- Fixed Eligibility Criteria
Since an instant personal loan is a collateral-free solution, most lenders insist that you earn a minimum income depending on your city of residence, as this assures them of repayment. Additionally, your credit report comes under scrutiny and a poor or average score can lead to you not getting a high loan amount or having to pay a higher interest rate.
As is evident from the aforementioned pointers, a personal loan has ample pros and a few cons, which you can easily overcome by picking the right loan provider and improving your financial profile. For instance, if you choose Bajaj Finserv Personal Loan you don’t have to worry about stringent eligibility criteria, you can make prepayments should you wish to, and enjoy a competitive interest rate too.
Moreover, to obtain an instant personal loan from Bajaj Finserv, all you need to do is check your pre-approved offer and enter basic details into a form. On doing so, you get approval through a customised deal and instant access to all the benefits of this feature-rich loan.