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The 6 Benefits of a Personal Loan You Should Know

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Created on
February 13, 2023


What’s Inside

Personal loans get a bad rap thanks to all the calls that sales agents make to us, especially at odd hours. The reason they do that in the first place (apart from the fact that they can make money off you taking the loan) is that personal loans are a great emergency financing solution. It’s sometimes simpler than asking a friend or family member for money, but also known to be cumbersome.

Times have changed now, and getting a personal loan online is a pretty smooth and paperless process. In fact, you can avail of a loan on Fi Money in a matter of minutes. 

Apart from the general ease of the process, there are a whole range of benefits that this article will cover.

The ABC of Personal Loans

Here’s the first few things to know about personal loans:

  • You can use these funds for any purpose
  • Banks, credit unions, and online lenders are the main sources to avail of these loans
  • There is a fixed end date to repay these loans
  • You can opt for a secured or an unsecured personal loan

When applying for such loans, evaluate factors like repayment terms, interest rates, limits on borrowing, and collateral requirements. 

6 Benefits of a Personal Loan

1. Fast Approval Process

Unlike traditional lending, unsecured personal loans are easy in terms of application and approval.

The lender checks your credit score after analysing aspects like active income, previous repayment history, dues, and credit card debt. If you have a good score, the overall process is fast, and you receive the funds quickly.

2. No Need for Collateral

Do you know a standout benefit of obtaining a personal loan?

You don’t need to provide details of any collateral asset (at least for unsecured loans). This means you can receive these funds without keeping a car, land, house, or other assets as security.

3. Minimum Documentation

Lenders check your credit score, KYC, and bank statements to provide personal loans. Generally there’s no other documentation required for a loan.

4. Versatile Utility

Buy your dream smartphone or travel abroad — personal loans have no limitations. You can also use a single fund for multiple purposes. Although, it is not recommended that you use personal loans for discretionary expenses (any expense that you don’t strictly need). You can instead consider using the loan for emergency expenses or debt consolidation.

5. Good Way to Build a Decent Credit Score

If your current credit history is poor, you can apply for affordable personal loans and make sure you repay them on time.

This way, your credit score improves, which makes it easier to subsequently apply for loans at better interest rates.

6. Fixed Rate of Interest

In the case of personal loans, you can choose the repayment tenure. The interest rates remain fixed throughout the duration.

Your only responsibility — pay the loan on time! That’s it. In most cases, you do not need to worry about any modifications in the interest rate.

In summary

Personal loans are a quick way to cover your financial requirements. They offer benefits like a quick process, less documentation, versatile applications, and a stable interest rate.

Get Instant Personal Loans in Minutes on the Fi app

Fi Money provides instant loans that arrive directly in your savings account. These are pre-approved personal loans made available to select users with good credit scores. On Fi, this process is 100% paperless, and the loans are provided at competitive interest rates — where each user remains in control with complete visibility of all details. Plus, you can avoid EMI late fees by setting up automatic in-app payments. Our licensed partner bank assigns an eligible loan amount to each user (up to ₹5 lakh).

Frequently Asked Questions (FAQs)

1. Why do people take personal loans?

People apply for personal loans to cover debts, remodel their houses, finance their vehicles or cover vacation costs. In addition, personal loans work well to take care of emergency expenses or higher education costs.

2. Is personal loan high risk?

The risks of personal loans include high-interest rates, upfront fees, and debt burden. If you fail to repay the loan, the impact on your credit score is negative.

3. Which is the best type of loan?

The best loan depends on your specific financial needs. Home loans are good for buying homes, education loans for education expenses, and personal loans for various purposes.

4. Which is better than a personal loan?

Some loans, like home loans or education loans, might be better suited for specific purposes due to lower interest rates and longer repayment terms.

5. Is it right to take a personal loan?

It depends on your financial situation and the purpose. Personal loans can be useful for various needs, but consider the interest rates and your ability to repay before taking one.


Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
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The 6 Benefits of a Personal Loan You Should Know


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