Credit is an essential part of our lives. It is not common to have sufficient funds to cover all your immediate needs. To meet fund requirements, most people resort to some form of credit. There are many reasons why you might need immediate funds. Some of these reasons are listed below.
- Payment of fees
- Purchase of a gadget/appliance
- A vacation of a lifetime
- Honeymoon and wedding expenses
- Home Renovation
- Investment opportunity
- Medical emergency
Because of its speed, ease, and convenience, personal loans have been a popular form of short-term financing in recent years.
Why is a personal loan better than other credit options?
This is why we need to understand the definition of personal loans.
What’s a personal loan?
Personal loans can be used for any purpose, either unsecured or free of collateral. No assets must be pledged to these loans. The product is very popular with millennials, which may be starting their first job and don’t have any assets.
What types of credit are available to the borrower?
There are many types of credit on the market. Many secured loans are available, including homes, cars, and education. An additional line of credit is a bank overdraft. You also have credit cards that you can use for any purpose. Borrowers also have the option of obtaining unorganised credit from moneylenders.
Why are personal loans considered more beneficial than other types of credit?
Personal loans are more popular than other credit lines because they offer many benefits.
No collateral – Borrowers can apply for personal loans easily because they don’t have to pledge any assets. Personal loans are the best option for short-term financing.
FinTech lenders have developed seamless platforms using new technology with a user-friendly interface. This makes it very easy to get a loan. It’s easy to go from applying to cash without leaving your chair or speaking to anyone.
Personal loans are available in a quick disbursement. This makes them a convenient choice, even for emergencies.
Minimal paperwork –Traditional loan applications require a lot of paperwork, making the process extremely cumbersome. Online personal loans require minimal paperwork. A few documents such as the PAN Card and Aadhaar Card, bank statements, and salary slips are required to be uploaded.
No human intervention. Personal loans online are completely contactless. The platform allows you to complete the entire process without human intervention. From start to finish, it is an automated and smooth process.
Less expensive than credit cards/unorganised credit – Credit Cards are only valid if the outstanding amount is paid on or before the due date. They charge between 2 and 3 per cent per month for the outstanding amount, which amounts to between 24-36% annually. Unorganised credit can be offered at outrageous rates. A personal loan is much more affordable at 11-20%, as opposed to these options.
Structured payment Unlike a credit line, where you can pay off the balance at any time, a personal loan has a shorter term and must be paid in full. This will ensure financial discipline. Before the borrower can take out a personal loan, he must create a repayment plan.
Versatility – Personal loans are very flexible compared to secured loans that are often purpose-specific.
Easy eligibility criteria Most lenders offer personal loans based on very basic eligibility criteria, which most of the target audience can meet.
Personal loans can be taken for the short term. You can choose a term that fits within your monthly budget.
24/7 access – Personal loans online are available to borrowers 24 hours a day, whereas traditional loans can only be accessed during bank holidays and times that are not convenient for borrowers. It’s as good as a credit card with lower rates, as you can access funds quickly for any of your needs.
Personal loans are more beneficial than other credit forms, as you can see.
Who is eligible for a personal loan?
LoanTap allows anyone who meets the following criteria to apply for a personal loan.
- He is an Indian citizen.
- He is more than 21 years old and less than 60 years old
- His net monthly income is more than Rs 30,000
How easy is the personal loan process at LoanTap?
LoanTap offers a robust integrated platform, accessible on the website and mobile application that can be downloaded from Google Play.
After downloading the app, you can complete the online application form.
Once you’ve reached this stage, you can relax and let LoanTap process your application. The LoanTap team will review your application and all documents and then run a credit check to verify your credit score. Your loan will be approved if you have good credit and meet all other requirements. The money will be credited to the account. The entire process can be completed in 24 hours if everything is fine and all information is correct.
LoanTap has flexible repayment options.
Step-up EMI – This option allows you to pay only the interest portion of the EMI for three months before the normal EMIs kick in.
Interest-only – You can only pay the interest portion of the EMI every month and make bullet payments towards the principal every quarter or half-yearly basis.
Overdraft – The personal loan can be sanctioned. You can use the overdraft like a regular overdraft. Interest will only be charged on the amount that is withdrawn and not the amount that was sanctioned.
LoanTap provides tailored personal loans starting at Rs 50,000 to Rs 10,00,000. Tenure terms can be as long as six months or five years. Interest rates start at 18% per year. The personal loan can be repaid in full within six months, without any prepayment penalties.