Benefits of Personal Loans

1. No limitation on end use
The first and the most important benefit of personal loan is that unlike home loan it can be used for any purpose. There are no limitations on the end use of the personal loan. You have any urgent requirement of funds; personal loan can be one of the easiest ways to get cash.
2. Quick disbursal
If you meet the eligibility criteria and have a good credit score, you can get personal loan in 72 hours’ time. Infact some of the banks provide the facility of online approval of personal loans for existing customers.
3. No collateral required
You don’t have to arrange for any collateral. It is an unsecured loan. Therefore, it is easy to get it.
3. Flexibility to choose the tenure
The tenure of the loan goes up to 7 years therefore you have the flexibility to choose a tenure which suits you best. Longer tenure means lower EMI and vice versa. Therefore, you can decide you can decide tenure after calculating the EMI.
4. Builds Credit Score
If you have a low credit score or are new to credit, a great way to build your score is by availing affordable personal loans and repaying them on time. As you pay your EMIs on time along with the pre-decided interest rate, your credit score will increase.
However, it is important to avail a loan amount that is within your repayment ability. If not, missing EMI payments can be detrimental to your credit score.
5. Fixed rate of interest
Personal loan is generally available on fixed rate of interest. So the equated monthly installments will remain fixed for the entire loan tenure. Therefore you don’t have to worry about the interest rate changes.

Is There a Tax Benefit on Personal Loan?

Unlike home loans, there is no tax benefit on personal loans generally. However, in certain cases, exceptions may be made such as if the loan is being used for home renovation, purchase of assets such as gold or when used for business expansion.
However, each of these use cases are subject to different terms and conditions and may not be applicable for everyone.

Things to Keep in Mind When Going for a Personal Loan

Now that you know some of the benefits of personal loans, here are a few things that will help you choose the best possible loan -

• Ensure that the amount being availed is within your repayment ability
• Clarify all the terms and conditions prior to availing the loan
• Compare interest rates from reliable fintech companies or bank websites and choose the option that is most suitable for you

Documents required for Personal Loan

Although the documentation varies from lender to lender, some of the essential documents you must provide along with your application form include:

• Proof of income (salary slip, bank account statement, ITR forms)
• Proof of residence and identity proof
• Certified copy of your degrees and licence (this is applicable only for self-employed applicants).
  suitable for you

Are there any foreclosure charges?

If you decide to prepay the loan before the end of the actual term, the lender may levy penalty charges known as foreclosure fees. This penalty usually ranges from one to two percent of the outstanding amount.

YOU CAN ALSO APPROACH PROFESSIONAL EXEMPLAR FINANCIAL PLANNER WHO CAN PROVIDE YOU UNBIASED ADVICE  ACROSS ALL LEADING LOANS PROVIDERS WHILE TAKING ANY PERSONAL LOAN.