Sudden expenses, medical emergencies, cash shortages are dreaded but unavoidable problems. And while we don't want to face any untoward incident, arranging for funds at a moment's notice to manage an emergency can be tricky.
A personal loan is a reliable option to manage a sudden expense. But is it sensible to opt for a short-term personal loan in emergencies? Read on to find out.
Benefits of a short term personal loan
Quick approval and disbursal
In an emergency, getting the money on time is crucial. Short-term personal loans fulfil this criterion perfectly. It has a fast approval process with minimum documentation. Though it varies from lender to lender, the disbursement also takes place quickly.
Competitive interest rate
Just because you need funds urgently doesn't mean you need to pay an excessive amount of interest on your loan. The personal loan market is highly competitive, so the interest rates are reasonable. Because of competitive interest rates and short tenor, the actual amount of money you repay is also not very high.
Additional read: How to choose a personal loan lender
No collateral required
Personal loans are mostly unsecured. That means you don't need to provide any guarantor or collateral security to avail of easy personal loans.
Also, there are no restrictions on the use of the fund. You can use it as per your requirement: for a medical emergency, family event, or even for recreational purposes.
No fixed range of loan amount
This is another feature in your favour. Unlike a home loan or auto loan, a personal loan does not come with a pre-defined range for the loan amount. The quantum of the loan depends on various factors such as your credit score, your repayment ability, income, etc.
So, if your profile ticks all the boxes, you can get as many loans as you need.
Additional read: Personal loan with low CIBIL score
Regulated market
In India, the personal loan market is highly regulated. Market watchdogs like SEBI and RBI keep a close tab on the lenders. No malpractice is allowed here. As a result, when you take a loan from a reputed lender, you can be assured that standard rules and regulations govern the company. There will not be any unfair conditions, and you won't lose your money.
In an emergency, our mind is focused on the matter at hand. We end up neglecting the finer points at that time, inviting problems later. However, our personal loan process is very clear and transparent, lightening your financial burden in times of need.
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