The Benefits and Drawbacks of Instant Personal Loans

Personal loans are considered one of the best financial assistance to deal with any sort of money crunch or emergency issues like medical emergency, education for kids, need of money for an instant foreign trip and many more. In other words, if you have a sort of money or need or want to get funds to enhance your financial condition, considering a Personal loan is good.

Personal loans are a type of unsecured loan and thus it’s an easy deal with many flexibilities but it has many drawbacks of personal loans too.

In this blog, we will let you understand the top pros and cons of borrowing an instant personal loan. Follow all the steps carefully:

Benefits of Taking an Instant Personal Loan

Personal loans come with many advantages and they help individuals to deal with their financial issues and other family problems. Some pros of borrowing an instant personal loan include:

Quick and Hassle-free Application Procedure

Most of the banks and lenders offer instant personal loans. You don’t need to visit an NBFC or bank to apply offline as the complete procedure is very straightforward. You need to go online and fill out the application form there. You should do every task digitally like uploading of your necessary documents etc. The easy documentation process and minimal processing fee make instant personal loans a boon for those who don’t have any way to deal with emergency issues and financial crunch.

Flexibility in Fund Usage

Once you have borrowed your personal loan, your lender won’t ask for any type of usage and the reason. You can easily use your funds anywhere or in any activity. With instant personal loans, you can easily tackle emergency issues or tackle unforeseen financial emergency. You can use your fund on anything like home improvement, repairs, foreign trip expenses, medical bills education expenses for your child etc.

No Collateral Required

Instant personal loans don’t require any type of security amount or collateral asset to provide to your lender. In this way, Instant personal loans provide more flexibility as compared to secured loans. You can easily get the loan amount without showing or disclosing your asset or any type of collateral like things.

Get Flexible Loan Repayment Tenure

Instant personal loans provide various flexibilities to the borrower and one of them is the tenure of loan repayment. When you proceed with your application form, you will be asked to choose your tenure for your loan. You can choose a short-term loan tenure or a long one. A low-interest EMI will be applicable on the short-tenure of the loan and a higher EMI on the long term. You should make your decision which one is good for you.

Disadvantages of Instant Personal Loan

High rate of Interest

One of the major disadvantages of borrowing a personal loan is the high interest rate. It is due to its unsecured nature. The rate of interest is high in this loan because there is no collateral to secure their value. In this way, the lender takes a very high risk and thus this loan has a high rate of interest.

Possibility of trapping debt

Personal loan is easy to borrow but it has a risk of the debt trap. If you have taken multiple loans with high interest, your entire income will go into debt repayment and thus you can’t manage your finances. Your situation may become worse than before before with the debt repayment risks involved to it.

Summary

Personal loans provide many benefits to the borrower as it is available for dealing with unforeseen events like medical emergencies, home repair, money crunch, home improvement expenses, immediate foreign trips etc. It has many cons too on the other side. These benefits and disadvantages are necessary to know for every person applying for this loan.