PROS AND CONS OF TAKING PERSONAL LOAN

Introduction

A personal loan is a kind of credit facility that is provided to an individual to cater to his various personal financial needs. It is to be noted that the facility of personal loans is offered by banks and money lending companies at a low rate of interest in comparison to other loans. Personal loans are preferred by the lender for various needs and purposes, like the wedding of a child, home renovation, etc. Personal loans are unsecured loans, which means the lender does not need to collateralize his security to obtain a lot, which is the bonus of availing personal loans. For obtaining a personal loan, fewer formalities and documentation are needed, so it basically facilitates quick cash. This article provides a general overview of the pros and cons of taking personal loans.

Advantages of taking personal loans

There area various benefits of taking a personal loan from banks, financial institutions and money lending company. There are licensed money lending company which offers personal loans ar reasonable interest rate. The main advantage of personal loan is that it does not require any collateral security to give as an assurance to the banks or financial institutions, which automatically indicates that an individual will fulfil his credit requirements without hampering it’s investment and savings. For more information click best personal loan in toa Payoh.

Personal loan is a great option if an individual needs quick cash as it approved faster. Less documentation and formalities attracts the borrower to take personal loans. When the personal loan is approved, an individual will get whole lump sum amount so it basically increases its financial stability so he can do whatever he want to do with money in fulfilling the particular purpose. The repayment of personal loan has also higher as compared to other loans.

Cons of availing personal loans

Availing personal loans had also drawbacks. One of the most important limitations is that the personal loans accrue high rate of interest as compared to other loans. Even sometimes money lending companies also charge extra expenses in form of applications fees etc. which is a negative factor. An individual can need collateral security Ife he does not have good credit score.

Conclusion

Personal loans are provided by various banks, financial institutions and money lending companies. It has its own advantages like no requirement of collateral security, quick cash, less documentation, high borrowing power etc. On the other hand, it has some limitations like high interest rate, extra charges, credit damage etc. So an individual should take personal loan if he has good credit score, no monthly payment etc.