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How A Personal Loan Can Help You Deal with Liquidity Crisis

  • Highlights

  • Emergency expenses and uncertain times can drain your savings

  • Personal Loan can help you financially during turbulent times

  • You can get access to funds within 24 hours

  • Get a high loan amount up to Rs. 25 lakh

All of us may face a cash-crunch at some or other point in life. Whether it’s a medical emergency, month-end blues, uncertain business outcome or any such financial distress, it could drain your finances. This can put you in a certain liquidity crisis with an urgent need of funds.
Personal Loans by banks and non-banking financial companies (NBFCs) can come handy during such turbulent times not only to fill this cash crunch but also to lower your overall debt burden by paying off some or whole of higher cost debts.

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What are the benefits of Personal Loans?

Personal loans can provide you with financial leverage that extends well beyond your monthly earnings. A few features like simple borrowing process and quick disbursal makes Personal Loan a prudent solution to manage your immediate cash-crunch.

- Simple Borrowing Process

The best thing about the Personal Loan is its simple borrowing process without complex lending terms. You can apply for a personal loan online for a personal loan or you can visit the lender with your loan application. After verification of your documents, you can get access to funds in a real quick time.

- Quick Disbursal Time

Another advantage of Personal Loan is that the funds are made available for use in as low as 24 hours. After the verification of your documents, the loan amount can be credited to your bank account within 24 hours. During the time of emergency, you can quickly get access to funds for your liquid use.

- High Loan Amount

You can borrow upto ₹25 lakhs as Personal Loans from NBFCs. With quick disbursal and convenient payout options, you can use this amount to meet your high-end requirements like renovating a home or big medical expense which could cripple your savings and budget.

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Your CIBIL score and your personal loan

Lower the interest rate, lesser the money you repay on the loan you borrow; this is the simple logic behind unsecured personal loans. But lenders do not assign the interest rate arbitrarily. They consider your credit score – a measure of your creditworthiness – to assign you the interest rate for your personal loan.

Your credit score ranges from 300 to 900. The higher your credit score, the better are your chances of getting approval and favourable terms on your personal loan. Lenders like Bajaj Finserv give preference to a credit score of at least 750 during personal loan application processing.

Lenders prefer an applicant with a high CIBIL score because it demonstrates their ability to handle credit well. A low score, on the other hand, indicates a previous instance of loan delay or default.

If your CIBIL score shows you to be a high credit risk, you will be charged a higher interest rate on your personal loan.

How you can use the Personal Loan?

Additional Read: Know How CIBIL Score Is Important for Personal Lending

How you can use a Personal Loan?

While there can be no specific end use of personal loans unlike other types of loan such as Home Loans, Business Loans or Car loans, personal loans are open funds that can be used for any purpose.

- Consolidation of debt

You also can use personal loans to pay off multiple debts and consolidate them into one. It preludes you

to keep track of multiple payouts and balances every month by clubbing all your dues under one single umbrella. A potentially lower rate and manageable EMI also means you can use your monthly income to meet your liquid needs without using all of them to repay your debt.

- Meet Emergency Expenses

Personal Loans can be used for meeting sudden high expenses such as a medical emergency or breakdown of your house or factory due to a calamity. Personal Loan ensures that you do not end up emptying all your savings during such crisis and you meet your monthly financial obligations without difficulty.

The content of this document is meant merely for information purposes. The personal loan features mentioned in this article are subject to updation, completion, revision, verification and the same may change materially based on policy revisions. For more details, please visit our Personal Loan terms and conditions page here.

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