Personal loans have no collateral attached to them. They are easily available and approved and are available in the form of quick cash from the loan providers. They have easy payback alternatives and involve the minimum amount of fuss to obtain them. Let’s look at the pros and cons of taking personal loans now.
Pros
No Collateral
The absence of collateral makes these loans more favorable for you to avail them. Consumers can easily take advantage of these loans with a certain amount to fulfill their financial requirements.
Quick
Personal loans are easily approved and readily available as there is relatively less fuss attached to this process. Consumers can thus get quick cash as long as they fulfill the basic criteria that the loan providers have set.
Flexibility of Use
Unlike some other kinds of loans, it is not necessary to use personal loans for one specific task or another. These loans can be used for tuition or weddings or business or any other thing that you need money for. There is no restriction on the use of the loan.
Low-Interest Rate
Personal loans have a low-interest rate as compared to other sorts of loans available. These loans are relatively less in amount and are availed for personal needs.
Fixed installments for fixed years
A fixed amount of installment simplifies your life by a whole lot. You can keep track of your installments better and make your installments more easily.
Cons
No Part Payments
For personal loans, part payments are not accepted, unless your loan provider allows you to make them. It can turn out to be more expensive in the long run.
Good CIBIL Score
Only customers with a substantial credit score are approved by the loan providers to give a loan to. Not everyone is allowed to get a personal loan, so you need to be very careful with your CIBIL score. The lower your CIBIL score, the more interest you will have to pay for the loan.
Loan Interest Changes with Credit Score
Borrowers who have a low credit score are given loan – if that – on higher interest rates. To make sure that it does not cost you more money than you can afford, make your calculations. Loan providers will have a fixed credit score necessary to give loans to customers, and any borrowers with a lower credit score than that will have to pay more interest.
The lawsuit in the Air
Personal loans come with the danger of lawsuit attached to them even when they don’t have collaterals attached.
Small loans
Banks offer loans to make more money over small amounts which prove profitable for them in the long run.
If you are in need of a business loan, First Union can help. We offer loans from short term loans to lines of credit. Call today!