Personal loans have been gaining popularity because they offer flexibility and features beyond the standard lending options. Here's everything you need to know about it.
For what can a personal loan be used?
You can use a personal loan to finance your child's overseas or higher education, pay for a dream vacation or any international trip, renovate your home interiors, pay the down payment for your car or home. Fund your medical emergencies, higher education and weddings with a personal loan.
In a personal loan, the lender usually doesn't ask too many questions about the utilisation of the loan funds.
How personal loans work
A personal loan is a type of instalment loan in which you borrow a fixed amount of money for a predetermined period. The loan has to be paid back with interest in Equated Monthly Instalments (EMIs) throughout the loan period.
Additionally, personal loans are unsecured loans. This means that you don't need the backing of an asset as security or collateral while availing of them.
Personal loan vs. credit card
Credit cards have a higher rate of interest on accumulated debt compared to a personal loan. The repayment period for a credit card is short, making it easier to default and incur heavy expenses in terms of interest. On the other hand, a personal loan has a more extended repayment period, making it more convenient.
Thus, personal loans help you finance long-term expenses and give you the option of consolidating your credit card or any other debt.
How hard is it to get a personal loan?
Personal loans are one of the most accessible loans because their application and approval processes are quick and straightforward. Nowadays, you can check your credit score and loan eligibility and apply for a loan online.
With pre-approved offers from Bajaj Finserv, getting a personal loan is even more accessible and quicker. Fulfil your financial needs by earning money in the bank with just 1-step verification. You simply have to enter a few basic details, and you can check your pre-approved loan offer.
Credit score needed to apply for a personal loan
Your credit score is one of the factors that determine your personal loan approval and conditions. You can get a personal loan even if you have a bad credit score. However, you will have to pay a much higher rate of interest for it.
Personal loan calculators
To help you make an informed decision, Bajaj Finserv offers online calculators like the Personal Loan Eligibility Calculator and Personal Loan EMI Calculator to help you determine how much loan you can afford to take. This will show you the cost of your loan in terms of interest rate and EMIs, which can help with your financial planning.
Thus, if you're looking to bridge the gap between your financial resources and your financial needs, getting a personal loan could be the way to go. Be sure to have a good repayment strategy in place before you apply.
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