Personal loans are one of the most versatile financial options available to you. In fact, 67% of Indians rely on them. And most of that is due to how people can opt for a personal loan with a bad credit score.
This may sometimes involve a co-applicant signing off on the terms with you. There can even be relatively higher interest rates in such scenarios. Regardless, this can be a boon for people who lack access to major banking institutions.
Put simply, a personal loan should be among your primary considerations when you want financial help. Paying for a new car, putting a down payment on a house, tuition fees, squaring off debts, unexpected expenses—the list can go on.
Personal loans offer several advantages, from tax benefits and forgiving repayment options to quick disbursal and approval.
Here are the five most noteworthy ones:
One of the less talked about advantages of getting a personal loan is the tax benefits they offer. Under section 24B, interest payments are tax deductible if you use a loan for home renovations or make a down payment for a house.
Even so, it is necessary to submit the appropriate documentation to prove that the money has been exclusively used for that purpose.
All personal loans are unsecured. In short, you don’t have to put up any collateral. Besides mitigating the stakes on your end, this makes them easier to access when compared to other financial options.
Still, it is crucial to note that this makes them a riskier investment for lenders. To circumvent this, most institutions will levy a relatively higher interest rate.
Personal loans are much more forgiving than other variants with high-interest rates. This is due to the extended repayment tenure, ranging from 2 to 10 years.
This is especially relevant when opting for a personal loan with a bad credit score. The resulting affordable monthly payments will allow you to improve it if you stick to the repayment terms.
Nonetheless, it is best to avoid overextending the duration as it can lead to higher interest rates.
Approval times and disbursal of personal loans are faster than most other funding options. Some lenders even credit the amount in under 24 hours. This makes them an excellent choice when you need financial backing during emergencies.
So, say you have unexpected medical expenses and lack the necessary funds. A personal loan can take care of that.
Among all the benefits of a personal loan, the most prominent one has to be how flexible and versatile they are.
For example, some funding options restrict you to specific circumstances. These variants have no such clauses. You can use them for anything from paying medical bills to consolidating accrued debt.
However, ask your lender about potential limitations to avoid violating any contractual agreement.
With reasonable terms and conditions, a personal loan is one of the best financial options available.
If you wish to avail of one, Fi Money can help. Our approval and disbursal process is 100% paperless, with instant access to up to 5,00,000 INR. Provisions like automatic in-app payments also allow you to opt for a personal loan with a bad credit score.
So, sign up on the app today and meet all your financial needs!
Most people use personal loans to consolidate their debts, finance large purchases or renovate their homes. Some other use cases involve paying unexpected medical expenses or university tuition.
Apart from not requiring you to put up any collateral, personal loans are approved and processed significantly quicker than other alternatives. This makes them accessible in case of emergencies.
The purpose of a loan is to provide individuals or businesses with access to funds they need but don't have readily available. Loans are typically used for various purposes such as financing a home, purchasing a vehicle, funding education, starting or expanding a business, consolidating debts, or covering unexpected expenses. Loans provide a means to obtain funds upfront, which are then repaid over time with interest according to the agreed-upon terms.
Deciding whether to take a loan or use savings depends on individual circumstances. It is generally advisable to use savings for expenses if possible to avoid debt and interest payments, but taking a loan may be necessary for larger expenses or to preserve emergency funds.