Personal loans are a panacea for any urgent cash crunch. A medical emergency, payments for a laptop, funding a vacation, quick cash for marriage- whatever the need, personal loans are here to help. Banks in India are more than willing to give a personal loan to the right applicant, but before jumping on the bandwagon it would be good if a borrower knows the benefits and drawbacks of taking a personal loan.
Benefits of a personal loan in India
1. No questions asked about the end use of the money
Banks will simply give the cash and it's up to the borrower, where to use it and how to use it. So, it is a very convenient monetary help.
2. No collateral, security or guarantor requirements
Personal loans are solely granted on the basis of an individual's credit-worthiness. Banks do take into account the income, employment, continuity of business and other factors so as to establish the fact that the borrower will be able to repay the personal loan with interest in due time. No collateral or security requirements are put forth by the banks for issuing a personal loan. This saves a lot of embarrassment and hassles.
3. Total confidentiality
Since there are no security or collateral requirements, personal loans can remain a secret between you and the bank. Moreover every bank has some privacy policies, which ensures adequate confidentiality.
4. Easy repayment
Banks provide personal loans for 12 to 60 months. Varying from bank to bank, these tenures allow easy repayment options to the borrower. The borrowed amount along with the interest rate is calculated for the entire tenure of the loan and a EMI is calculated which the borrower has to pay every month. Personal loans also come with a prepayment clause.