To borrow is a necessity not a habit
Need to borrow to pay education costs or meet the sudden surge in medical expenses? Well, personal loans are a quick solution to your problems. You might be apprehensive about many factors pertaining to the application and sanction but if you’re really in need of some quick funds, it’s worth it. Before you proceed and decide what to do, it’s important to go through a few basic key concepts and process to keep yourself informed. The following might help you in getting a brief, but doesn’t guarantee to solve all your financial issues or fund-related obligations.
Let’s begin then with a very simple question.
What is a personal loan?
To put it in a candid manner personal loan is a type of fund granted to the applicant based on his ability to pay back. They are usually provided without collateral and are subject to repayment through installments over a pre-defined or contracted period of time.
Advantage: These funds generally tend to be quicker to avail and have relaxed pay back terms. The amount varies with your capacity to pay back which in turn is determined on the basis of your income details. But the main advantage of personal loans are no collateral and they have a particular interest limit which is directly under the jurisdiction of the financial law levied by the concerned state. Even in case of online borrowing the laws apply. Many companies like UnitedFinances help to get a personal loan easily and quickly.
Financial institutions to look at:
This is the most important decision when it comes to acquiring personal funds. Different financial institutions have set of parameters pertaining to lending. Therefore, the onus is on you to calculate and chalk out the best one that suffices your needs without much difficulty. Here’s a list of the potential lenders you can try out and the pointers that suggests the winners and downers
- Values existing customers
- Relatively safer as an institution
- Not much ambiguity in contractual terms
- Not much flexibility in the fund amount
- Very lengthy application process
- No relaxation on interest rates or installment amounts
State Regulated Lenders
- Safe and secure loan sanction
- Generally do-not demand collaterals
- Often announce special schemes for the state locals
- Strictly follow state regulated guidelines
- Don’t prefer to do business outside the state
- Not many competitive deals according to market standards
- Lower interest rates and smaller installment amounts over a longer period
- A huge part of the local population forms the employee base which in turn helps them to take progressive decisions to assist the needs of the local fraternity
- Operate locally
- Business plans are made primarily based on the needs of the local population
- Lenient of financial criteria
- Members or account holders enjoy special benefits
- Mainly operate for the cooperative members
- Legal obligations are there if not registered
Peer to peer lenders
- Financial flexibility, large amounts and lower interest rates
- Offer specific deals for customers and are done online without disclosing too many personal information
- No regularized application process takes least time to avail
- Too much anonymity and at times customers fall prey to fraudulent lenders
- Unsecured process and loan sanction with no limit or judicial regulation
What to keep in mind while taking decision on loan lender:
• The deal offered: Choose it according to your comfort and need.
• Goodwill: Doing business with reputable lenders is always advisable. Never go for preposterously low interest rates. In most cases they turn out to be fraudulent.
• Contractual terms: Payback and other financial terms are to be emphasized upon as they define the lending and borrowing terms. Take your time to go through them properly.
• Transactional security: Authentic financial organizations will never ask intrinsically for personal bank or financial details. They in all probabilities ask for a down payment concerning personal funds.
• Support services: Special deals and schemes along with customer support can also contribute to your decision.
• Flexibility: Both online platform and in person dealings should be available.
The personal loan lending business has grown leaps and bounds in the last decade or two. Ranging from the inception of the online platforms to specific individual best deals – the advantages are on the upsurge. Research, calculate and choose the one that offers you the best solution package for your needs.
Author’s Bio – Sam Payn is a reputed online loan industry writer. He writes on a wide variety of loan related topics for leading loan websites like UnitedFinances and others.