If you’re looking for a finance option in the market, you probably know about personal loans. These unsecured loans cover a wide range of expenses conveniently and are extremely popular among borrowers.
To put some perspective, roughly 77% of working Indians manage their finances with the help of a personal loan.
Wondering what makes them so popular? Let’s take a look.
#1 No collateral requirement
You can get a personal loan without putting up collateral. So, you don’t have to pledge valuable assets like a fixed deposit or shares. All you need is a good credit score and a minimum monthly salary to qualify for the loan.
#2 Simple loan eligibility criteria
Today, financial institutions offer unsecured personal loans for unemployed, retired individuals, self-employed professionals, in addition to salaried professionals. In fact, anyone meeting their eligibility criteria can apply for the loan.
These typically include falling within the specified age bracket, earning a minimum specified salary/pension, having a decent credit score, and so on. If you are falling short, you can also get a co-signer to meet the credit score requirement and apply.
Additional Read: A Complete Guide to Secured and Unsecured Personal Loans
#3 Minimal documentation
In general, documents required for a personal loan include:
- Photo ID proof
- Income proof
- Salary slips
- Address proof
- Employment certificate
- KYC documents
Most people already have these in place, thereby making the application process easier as well.
#4 Flexible Tenure
Although personal loan tenures are typically short, extending to a maximum of five years, most lenders also allow you to choose the repayment tenure. This means you can select a tenure depending on your monthly obligations and repayment capacity. So, the repayment process isn’t burdensome.
#5 Reduced loan cost
Unsecured personal loan interest rates are usually affordable considering the loan tenure. Since repayment periods are usually short, people don’t mind paying slightly higher EMIs if it means a reduction in the overall loan cost.
#6 Improves CIBIL score
Along with helping you get instant funds, a personal loan also helps you diversify your credit lines. In fact, making timely EMI repayments can raise your CIBIL score over time. This increases your creditworthiness and opens doors for different types of loans, higher loan amounts, and even lower personal loan interest rates.
Additional Read: Pros and Cons of Unsecured Personal Loan
#7 Online application
Nowadays, many lenders offer personal loans online. Not only can you apply from the comfort of your home, but also at any time you prefer and any day of the week. What’s more, there are no in-line waiting times involved during application processing. This makes the entire process quick and hassle-free.
Given the benefits of relaxed personal loan eligibility, ease of application, and repayments, personal loans are undoubtedly a popular choice among borrowers.
If this has convinced you to opt for one, you must apply with a trusted lender like Tata Capital. Not only do you benefit from an easy application process, but also a strong after-sales service. Check the terms today and plan your repayments with our personal loan EMI calculator.