One of the best yet worst things about emergencies is the fact that it can happen to anyone and at any point in time. No matter how stable you are in life and how much money you earn on a monthly basis, during a cash crunch all doors seem to close with no hope in the vicinity.
If you are facing a cash crunch situation right now, one of the first options that might have come to your mind is to borrow from friends and family. Not only is this option difficult to execute, because rarely would anyone lend out a huge credit, but also asking money from people you know is a little embarrassing.
On the other hand, if you take out a personal loan, not only will you get the loan disbursed on the same day or less, but also save yourself from following up with friends for the money you need.
But are you aware of what a personal loan and why it can be your best savior in a cash crunch scenario? If not, then this article is for you.
In today’s article, we will tell you what exactly is a personal loan and how by choosing the right one, you can save yourself from a cash crunch scenario. Let’s get started.
What Is a Personal Loan?
One of the first and most important things you need to understand is the meaning of a personal loan. In simple terms, a personal loan can be explained as being a loan, the money from which can be used to meet any unforeseen situation or emergency. One of the most important distinctions between a personal loan and other standard loans like a vehicle loan, home loan, etc. is the fact that these loans limit you to only one spending motive and don’t let you spend the money on your exact needs.
On the other hand, a personal loan can be used for any purpose, starting from paying off a credit card bill all the way to paying back your car’s monthly EMI.
This is one of the biggest advantages of a personal loan, and that’s why it should be your go-to choice when in a cash crunch situation.
Features of a Personal Loan
There are multiple features of a personal loan, and some of the most significant ones are as mentioned below.
Easy to Access
One of the first and most important features of a personal loan over all other standard loan offerings in the market is the fact that they are the easiest to avail. With so many fintech startups in India starting from smartphone-based solutions like Money View all the way to web-based solutions like Dhani, Bajaj Finserv, LoanBaba, the number of personal loan lenders in India is quite high, thus making it easy for anyone to avail the service.
Almost all of the most well known and respected lending companies in the market have a completely online and paperless process. This essentially means that you don’t need to visit any type of office or meet with an agent to avail of the loan. All you need to do is visit the website or download the app from the lender of your choice, fill out all the requested details, and your entire application will get processed seamlessly.
The next feature of personal loans is the fact that most lenders these days make use of AI and Machine Learning algorithms to instantly process your application and share your eligibility in a matter of a few minutes. This process of instant approval not only makes the entire process much easier but also significantly decreases the time between you needing the loan, and you receive the money in your bank account.
Flexible Repayment Schedule
If you take a look at some of the standard loans which are offered in the market, be it a vehicle loan or a property loan, they generally have a very stringent repayment schedule. The reason behind this being, these loans offer a large sum of money, and thus having a fixed repayment schedule makes sure that the loss exposure of the lender is significantly reduced.
On the other hand, personal loans often offer very small amounts and thus can afford a more flexible repayment schedule. For example, ETMoney, which is one of the leading personal loan lenders in the market, offers as low as ₹3000 for emergency use and the borrower has the option to pay it back in 3 to 6 months.
All these features of a personal loan have been designed keeping in mind the needs of the modern consumer and analyzing the best method to help the consumer when they need emergency cash, thus making them useful advantages.
Now that you know all about personal loans and how they can help you in a cash crunch, go ahead and apply for one from any of the top-rated lenders in the market.
Author Bio: Surya Patra is a qualified webmaster by profession and Marathon Runner/Cyclist by passion with more than 6+ years of expertise in the financial domain. Surya is also an entrepreneur, enthusiastic in storytelling, content writing, and digital marketing professional.