Personal loans are a way of life for millions of people in India. And, the growth has been better than exceptional in the past few months. If the RBI data is any indication, then personal loans command a whopping 28% of all loans approved by Indian lenders.
One of the most major reasons for the popularity of personal loans is its flexibility.
In India, you may apply for a personal loan for fulfilling any cherished dream or meeting sudden financial obligations. Perhaps no other loan gives as much liberty to you as a personal loan.
Read on to discover the reasons that make personal loans one of the most popular loans in India and find out the benefits of applying for a personal loan at this moment.
- Easy Access
A few years back, to apply for a personal loan, you needed to make multiple rounds of lenders, wait in queues, and decode the loan-related jargons. With the advent of modern-day technology-oriented lenders like Fullerton, getting a quote and applying for a personal loan has become easier than A-B-C.
You may use an online personal loan EMI calculator to get a quote, upload your documents, and wait for loan approval. Generally, it takes no more than twenty-four hours for the loan to get approved.
- Flexible Use of Funds
Unlike exclusive loans like home loans, auto loans, or medical loans, a personal loan can be used for any purpose you like. Hence, you might have something in mind while applying for the personal loan but may also spend it on an entirely different purpose. You may stay assured that no loan officer would ever ask you about how you actually use the funds.
The flexibility to use funds the way a borrower wishes to is one of the prime reasons why people apply for personal loans.
- Tax Benefits
While there is a general perception that personal loan is not an excellent tax-saving option, facts prove otherwise. You may save taxes of up to INR 2 lakh a year by using the personal loan funds for the home construction or home improvement. By using the funds for business purposes, you can save taxes on the interest repayment.
Hence, if used properly, a personal loan can be an excellent tool to save income tax.
- No Need for Collateral Security
When you need money urgently, lenders would often encourage you to deposit an asset, which would act as a security in case of a default. A personal loan is the only such loan that does not require collateral, and hence, gets approved quickly.
However, when you apply for a personal loan, the loan amount depends on multiple factors like your credit profile, monthly income, total liabilities, repayment capability, and the stability of income. The higher the trust factor, the better the loan amount you may receive. You may also use a personal loan EMI calculator to get an estimate of the amount you are eligible for.
- Minimal Documentation
When you apply for a collateral-based or secured loan, the lender would ask you to submit multiple documents, which includes the collateral documents. The lender would also verify the legal status of the asset before approving the loan.
A personal loan, however, is a no-frills loan, which means you do not need to submit more than seven to eight documents while applying for the loan. Mandatory documents include identity proof, address proof, age proof, income statement, PAN Card, Income Tax Returns file, bank account statement, and any other document specified by the lender.
Conclusion
With technology gradually taking over almost every aspect of life, applying for a personal loan has got much more straightforward. Borrowers generally use the personal loan EMI calculator to calculate the loan amount and eligibility and get the funds in their account within 24 hours. The repayment starts one month from the date of loan approval.
