Don’t Borrow Personal Loans Blindly; Consider These Factors First

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Are you a salaried employee or self-employed? Is your mailbox overflowing with messages offering you Personal Loan offers with very attractive terms?

It might mean that you have a good credit history and that banks and non-banking financial companies (NBFCs) are coming forward to offer you a Personal Loan. If you want to take thisloan, it is advisable to consider the pros and cons of such a loan. What are the factors that you need to consider before availing such a loan? How will you pick the right loan?  Hopefully, you will have answers to these questions after reading this article.

What is a Personal Loan?

A Personal Loan is an unsecured loan that helps you meet your current financial needs. You will have the flexibility to use the loan as per your discretion. You can use it for a vacation, home renovation, child’s education, business expansion, medical emergencies or any of your non-specific requirements. It is because of this flexibility; the Personal Loans are gaining popularity by the day. 

Advantages of a Personal Loan

  • The major advantage of a Personal Loan is the ability to use the loan for any requirement. This flexibility is not offered by most other types of loans like a Business Loan or a Home Loan.
  • The second reason is quick disbursal. Banks and NBFCs are using technology to make the process quicker and easier. 
  • The third reason that makes these loans attractive is the loans being unsecured. You do not require collateral to avail such loans. Also, when you avail a Personal Loan for renovating your house, you are eligible for an IT deduction up to Rs. 2,00,000. However, you will have to establish that you have used the loan only