Financing big-ticket expenses with a limited means of income has been one of the biggest challenges for the common man. Expenses like higher education, wedding, medical needs, and home renovation are not only jolting but also non-negotiable. But meeting these expenses with your regular income may seem like an impossible task. In such situations, a personal loan can come in handy. Today, you can easily apply for a personal loan through a loan app.
Personal loan apps have made personal financing easier than ever. These loans are both accessible and affordable. You can simply download the app, fill out the form, furnish the necessary documents and avail a quick loan in a few minutes.
Read on to understand more about personal loans and how they work.
Meaning and Scope of a Personal Loan
A personal loan is a customised financing option that allows borrowers to meet their diverse financing needs. These loans are available as unsecured advances which means that you do not need to provide any asset as collateral to avail a personal loan. Most lenders require you to meet a handful of eligibility criteria and request to submit a few documents to approve your loan application. They rely on your income and your credit score to estimate the risk associated with your loan application.
Personal loan advances come with flexible repayment tenure, which is usually 12 months to 60 months. Also, the repayment schedules are set conveniently and borrowers need to repay the loan in easy EMIs. Financial institutions also provide dedicated financial tools like personal loan eligibility calculators and EMI calculators, which you can use to assess your borrowing affordability as well as maximum loan availability. You can access these financial calculators through a loan app for free.
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How Does a Personal Loan Work?
The working of a personal loan is simple and easy. Below given are the few steps that complete the working of the advance, irrespective of whether you avail financing through conventional lenders or a personal loan app.
- As a first step, you must check your eligibility for the loan with the selected lender.
- Make sure you meet all the eligibility criteria and have all the documents listed by the lender.
- Make sure all the details filled in by you are correct and the documents are in the requested format.
- If you satisfy all the requirements cited by the lender, then the lender will approve your application and you will be notified through an e-mail or message.
- Once approved, the loan will go through a disbursal process.
- In the disbursal process, the lender will deduct the processing fees, GST and any other charges. The rest of the loan amount will be credited to your bank account.
- Post the disbursal you will be notified.
- Next, you need to start repayment of the loan in EMIs payable throughout the tenure, or until complete loan liability repayment.
- Once the loan repayment is complete, the lender will release a NOC.
While availing a personal loan, you don’t need to worry about risking your personal assets as there is no need for collateral. However, you have to make sure that you have a good credit score, a stable source of income, all documents related to your income and a repayment strategy.
When you avail a personal loan through a loan app, your repayment becomes much easier with constant reminders or auto-debit facilities.
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Top Features and Benefits of a Personal Loan
Some top features that these advances come with include the following:
- Personal loans are high-value financing options allowing easy fulfilment of big-ticket spending.
- You can also use the loan amount as per your discernment since it does not come with any restrictions to end-use.
- The loan tenures are long and flexible.
- The loan options are affordable as they attract low-interest rates as well as other fees and charges.
- The EMI schedule for this loan is simplified and easy to manage.
- It comes with simple and minimal eligibility as well as documentation requirements.
Conclusion
With these many features and benefits, a personal loan surely carves its niche in the lending-borrowing market. It has witnessed an increasing demand among the borrowing class. With its easy availability through personal loan apps, the accessibility of this unsecured advance is brought right to one’s fingertips today.
Given that the loan has diverse use with no end-use restrictions, it only further becomes a preferred financing option for many aspiring borrowers today. Further, lending institutions keep modifying and refining the features of these loans to better tailor them to borrower demands today. You can thus simply pick your suitable choice of loan today and proceed to its eligibility check and application in a few simple steps only through online platforms like loan apps.
