While cruising through this
fast-paced modern life, you are bound to face a few financial bumps in the way.
Financial requirements and liabilities can appear from one of the most expected
sources and can put you in trouble. To not let yourself get bogged down by
these roadblocks, taking a small personal loan is one of the best ways to go
by.
Small loans, amount depending on your need, can streamline your short-term financial needs and you can pay them back one bit at a time in a given period of time. Financial institutions and NBFCs, like Fullerton India, have made it very easy to take small personal loans with minimal documentation. In this article, we will discuss the benefits of taking small personal loans.
Benefits of Taking a Small Personal Loan
1. Borrow Higher Amount than a Credit Card
Credit cards are one of the most used
financial instruments by people these days. People often use credit cards to
finance their small financial needs by paying for it upfront using a credit
card. However, there are instances when the buying limit of a credit card is
not enough to meet your current requirement. In that case, taking a small
personal loan can be a very good idea and maybe, the only efficient way out.
Personal loans are a great way to achieve your next financial milestone which otherwise is not possible through a credit card.
2. Lower Interest Rate
Financial institutions and NBFCs, like Fullerton India, have come up with great schemes for personal loans being offered at attractive interest rates. The interest rates on credit cards are relatively much higher and hence, it can prove to be a costly way to cover up your financial needs.
3. Collateral Usually Isn’t Required
People have this prejudice against loans that they always require collateral to be put against the loan. However, it is not always the case. For personal loans, and especially for small personal loans, putting collateral is not required. Your credit score will be verified for your financial viability. If everything seems to be in order, then the loan shall be disbursed in the next 48 hours.
4. Avoiding Multiple Credit Card Accounts
As we discussed, a credit card may not always be able to help you in your financial crisis due to its limited purchasing power. However, to get multiple credit cards as a measure to tackle this is also not a great way to go about it. Credit cards have many hidden charges like annual fees and what not. Having multiple credit cards will result in paying extra charges every year apart from the high interest you will pay on the amount borrowed.
5. Flexible Payment
Personal loans have a flexible mode of repayment. At best, you know the exact date of repayment every month which has been decided by you. This gives stability in financial planning and peace of mind to the borrower.
6. Longer Tenure
When compared to the other
alternatives to secure a small amount of money, a small personal loan from a
good financial institution allows you a longer tenure for repayment. The
alternatives, like credit cards or some subprime lender, might look lucrative
at first but the high rate of interest and small tenure of repayment will choke
you financially. Hence, you should prefer taking a small personal loan from a
good financial institution which offers you a good rate of interest too. You
can check the EMIs by using the personal loan
interest calculator online.
Final Thought
Hence, taking a small personal loan is one of the best ways to take care of your short-term financial needs. The points given above will help you in finding a good lender to approach and take the loan from.
