The benefits of a personal loan
A personal loan is not just a blessing for those who are in immediate need of funds such as loans against gold or car finance online or even small loans for students. They are also vital financial products to increase liquidity in the market. If taken and used wisely, repayment planned accordingly, taking low-interest car loans or best personal loans for a wedding can actually increase one’s wealth. This is unlike the notion that taking a personal loan is improving one’s debt burden.
The following information discusses some of the benefits of personal loans.
- All debt is not bad debt. To get an instant personal loan from Buddy Loan is easier than most places.
- When an unsecured personal is borrowed for an investment, a venture, business continuity, business expansion, personal priority expenditure – debt becomes a good thing. This is because debt is creating opportunities, creating personal, professional, or business inertia.
- Without proper liability, people, businesses, and corporations would be at a standstill.
- A personal loan is a broad category to refer to several sub-loans.
- Some of them, namely travel loans, educational loans, home renovation loans, loans against two-wheeler, medical loan, and so on.
- There are so many types of personal loans to fulfil the funding or expenditure needs of every aspect of a person, professional, or business.
Competitive interest rates
- Most personal loans are short-term finance products with flexible tenures and come at a variety of interest rates.
- Be it low-interest car loans, online gold loan, or personal home loan, the interest rates are starting at 11.99% p.a. depending on factors such as the amount of loan, credit history, secured/unsecured loan, credit score, purpose, etc.
- However, when comparing these interest rates to credit card interest rates, personal loans win hands-down.
- Being mostly unsecured loans, regular personal loan borrowers with a good repayment track record can even be offered low rates in the range of 6% to 7%!
Available for all types of credit ratings
Not everyone has a good credit rating. But that does not mean they are doomed and cannot get a bike loan instant approval or a student loan for study abroad purposes. There are innumerable banks and non-banking financial corporations that offer personal loans to those with varying credit ratings.
While some want higher credit ratings, some can do with nominal credit ratings. Therefore, a personal loan is an excellent alternative to come out of credit card debt fast and start on a sound footing.
The uses of a personal loan can vary
There are innumerable ways a personal loan can be used. They offer a wide variety of solutions for pressing financial needs. Be it working capital in the form of SME business loan, travel expenses, business expansion funds in the form of unsecured business loan online, personal credit such as bank loan for medical treatment – the range of uses of a personal loan is vast. The following information by Buddy Loan discusses some common uses of a personal loan.
- Credit card debt consolidation
Sometimes it may happen that using several credit cards could increase debt in all of these cards. Outstanding balances in several credit cards could go undetected by the cardholder. It could increase their debt burden, and ultimately spiral out of control.
By taking a personal loan and repaying all the outstanding amounts on all credit cards, debt can be consolidated into a single loan vehicle.
- Home renovation or reconstruction
Home improvement loans are a special type of personal loan that provides funds to refurbish the home. There is no need to go through the lengthy process of checking housing loan eligibility. This is unlike the process of applying for a home loan.
The funds can be used for expansion of the home premises, renovation, increasing the safety of the home, etc. Being a hybrid between the best housing loan product and a personal loan, home renovation loans enjoy nominal rates of interest.
- Wedding loan/Marriage loan
Gone are the days when money for planning a wedding was a significant concern. It would involve length bank procedures and waiting periods. Since the arrival of instant marriage loan products offered by Buddy Loan, weddings are happening at a moment’s notice thanks to marriage loan products online!
The fast application process, easy documentation, and fast disbursal make these loans a go-to source of funds for those planning a wedding.
- Vehicle loan
You can get two-wheeler loan instant approval in a matter of hours. Auto loans, motor loans, bike loans, car loans – all of these personal loans provide immediate funds to purchase a locomotive. There is no discretion on the cost of the vehicle – these are the times of instant bike loan online products. It could cost a few thousand to a few crores! But banks and non-banking financial institutions are more than willing to lend the loan. No more waiting for the right time to buy that dream car or bike. The time is right here, right now!
- Business personal loan
Capital – this is the prime word that comes into discussions when starting a business. It could be in the form of start-up capital to set the ball rolling or working capital to keep the business continuity.
There are several other reasons a business or entrepreneur loan can be helpful. The funds can be used to purchase equipment, pay for office space, purchase raw materials, and so on.
Given the vast number of users need a personal loan, if one is looking for immediate funds, then look no further than a personal loan by Buddy Loan.
Impact of personal loan on credit score.
Unlike the common notion that taking a personal loan can increase one’s debt burden, and it will affect credit ratings, the opposite is true. For the best information on personal loan click on www.buddyloan.com. Avail the best benefits with your present credit score.
Firstly, getting a personal loan from Buddy Loan is seen as a good sign by banks. Secondly, repaying the personal loan without defaulting on the payments increases credit ratings automatically. So, taking a personal loan such as a loan for daughter marriage, instant loan for students, or car finance loan can be a good thing for debt-ridden persons or businesses to increase their credit ratings provided they are confident to not default on any repayments.
- Credit ratings get affected in the following scenarios:
An application for a personal loan gets rejected: The reason for rejection is recorded and also sent to the credit bureau. Therefore, applicants must be doubly sure before applying for a personal loan. It could be any loan – ranging from best gold loan offers to best medical loans for surgery. It is recommended that they check their eligibility, read the terms & conditions of the loan, and make an informed application of their urgent medical loan or gold loan bank credit, etc.
Repayment behaviour: On-time repayments improve credit ratings. Even a single lapse in the repayment schedule can decrease credit ratings.
Debt consolidation: Credit ratings improve when all debt from different loans or credit cards is consolidated into a single loan. When a person or business only has a single loan to repay, their credit ratings improve as opposed to having multiple loans.
- Check your creditworthiness
Most banks provide what is known as a pre-qualification process. In this process, applicants can check if they qualify for the personal loan offered by the bank.
- A pre-qualification online form should be filled with information such as income, profession, existing loans, etc.
- The lender then proceeds to check the applicant’s credit history, eligibility, etc. They give an estimate of how much personal loan they can offer.
- They may also deny a personal loan. In the process, they also inform the credit score of the applicant. They may also recommend alternatives.
- It is up to the applicant to accept or deny the personal loan.
They can choose to apply for a car loan or just check the latest housing loan interest rates, or select an easy medical loan online. It’s all about making the right choice.
- Banks on creditworthiness
Financial institutions have varying models to assess credit risk. The first and foremost consideration is credit repayment history. In a creditworthiness assessment model, repayment history makes up 35% of the scoring criteria. So, the important thing to focus on is never to miss a repayment.
Taking a personal loan is a good thing. If repaid on time, personal loans can increase the wealth of a person or business. Because remember that only good debt creates wealth – the fact that many have not yet understood or unwilling to understand! Good debt arises good credit and vice versa!
Personal loan repayment!
Often understanding how to repay a personal loan goes a long way in managing one’s debt efficiently. For the best information on personal loan click on Buddy Loan. Avail the best benefits with your present credit score.
Not only does it protect one’s hard-earned money, but it also saves valuable time, reduces financial obligations, improves one’s credit score, and makes one financially stable.
Here are some ways to plan a personal loan repayment as per Buddy Loan:
- Use savings to repay the loan!
Outstanding debt can be repaid by savings. This is an effective way to reduce the debt burden. Using savings to repay loans is never old fashioned. Whenever taking an online personal loan, if one is prepared to repay the loan using one’s savings, then get ready for a financially stable future! Apply for a business loan, apply for a home loan, check for second-hand bike finance – do all of this without worrying about repaying it if every month savings are anticipated.
- Consolidating debt
Many loans can be consolidated into a single loan. Taking one personal loan that repays off all other loans is akin to consolidating debt. So if someone has an existing instant medical loan, home finance product and small business loans – all of these can be consolidated into a single loan,
- Reducing loan tenure
Longer the tenure, the more the interest paid, and more is the risk. Although the EMI could be smaller when compared to short-tenure personal loans, it is always advisable to go for short-tenure loans. So consider reducing the tenure of the loan if anticipated profits or savings are substantial enough to make consistent repayments. With this approach, whatever be the type of loan – personal loan for a vacation, unsecured medical loan or loan on gold – one can expect to save more than lose money on interest repayments.
- Making part-payments
Taking a personal loan product with a reducing rate of interest is an ideal way to slowly decrease debt burden over some time by making part-payments. When a part payment is made, interest is charged only on the outstanding principal. EMIs are recalibrated, and a new EMI schedule is generated. So many loan products offer such schemes – gold loan on Sunday bonanza products, best car loans, or urgent medical loan products – there is a wide variety to choose from on Buddy Loan.
- Foreclosing the loan
When a surplus or lump-sum corpus of money is expected, completely foreclosing the loan reduces the debt burden to zero. It also improves credit ratings and makes one viable to obtain more personal loan products from various banks.
The main function of a personal loan!
A personal loan is a form of credit. It is unlike credit from credit cards, a loan from mortgages, short term finances or hand loans, etc. For the best information on personal loan click on www.buddyloan.com. Avail the best benefits with your present credit score.
When each type of lent credit has a purpose, a personal loan is general-purpose. One can use a personal loan from Buddy Loan to pay-off a mortgage loan, consolidate debt, use it for travel expenses, buy a vehicle, etc.
Common personal loan terms
- Principal – The corpus of money that is borrowed. If an amount of Rs. 100000 has been borrowed for let’s say loan against two-wheeler, then the principal is one lakh rupees. The lender charges an annual interest rate on the principal. Equated monthly instalments are calculated based on the per-month interest rate. The amount of principal or loan amount is between Rs.100,000 to Rs.25,00,000. This is generally the range no matter whether it is a loan online for business, unsecured personal loan, or second-hand bike finance.
- Interest – A personal loan is not free – because the lender generally uses investors’ money or deposits of their customers to lend to the borrower. This means that the lender will have to pay a charge to their lender (which is the customer) and also levy a charge for their operating costs of managing the money. All of this adds up to be the interest rate.
- Term – Refers to the tenure of the personal loan. All personal loans, be it an instant medical loan, an online home loan, or bike loan instant finance, have comparable tenures. A personal loan has an average tenure of 60 months – or five years. The lender does not fix the term of the loan. Instead, the option to choose the tenure is given to the borrower. Shorter tenures or longer tenures, the borrower pays the same amount of interest over the tenure period towards the loan.
- EMI – Equated monthly instalments are every month payments towards the personal loan. An EMI consists of the principal portion and interest portion. The principal portion repays the principal amount and reduces the principal.
The process to apply for a personal loan is easy and quick.
Check eligibility with the bank. Fill the online form. Furnish details such as income, PAN card, number of years in service, etc. Wait for an intimation from the bank. The bank checks the credit-worthiness of the applicant and informs on the amount of loan that can be disbursed. More the credit-worthiness, more is the amount of loan disbursed.