What is Personal Loan

What is Personal Loan? Things You Should Know

March 19, 2022 • 87679 views

Financial needs can occur anytime and mostly when you least expect it. Opting for a Personal Loan is a feasible option during emergencies. Whether you require funds to fulfil a personal expense, consolidate debt, host a wedding, pay for a medical emergency, go on a vacation, or any other requirement, a Personal Loan is an ideal financial resource. Read on to learn what is a Personal Loan’s uses, features, and benefits.

What is A Personal Loan?

A Personal Loan is an unsecured loan that can help you meet numerous financial needs. This is an unsecured loan, meaning it does not require you to pledge any security or collateral and is available with minimum documentation. You can avail of this loan with a flexible repayment tenure and pay through manageable EMIs. The funds from a Personal Loan can be used to fulfil several personal expenses.

Most people prefer Personal Loans as an alternative to credit cards as it is offered at lower interest rates and better repayment terms.

Apply for Personal Loan

What Are the Uses of a Personal Loan?

A Personal Loan comes with no end-use restrictions; you can secure this loan for the following purposes:

1. Buy New Home Appliances

You can avail of a Personal Loan to buy new home appliances, such as refrigerators, washing machines, TVs, ACs, etc. This helps to upgrade your living standards without straining your budget.

2. Upgrade to the Latest Smartphone

Smartphones have become a part and parcel of our lives, but buying the latest high-tech smartphone is often costly. A Personal Loan makes it easier to get your desired smartphone without worrying about its high costs.

3. Host a Wedding  

Hosting a grand wedding requires large funds to cover various expenses, which can be easier with a Personal Loan. You can book your dream destination and get the best caterers, photographers, decorators, etc.

4 Meet Medical Emergencies

Medical emergencies like an accident, critical ailment, or serious injury, often happen unannounced. In such situations, a Personal Loan helps you get the best treatment without any financial stress.

5. Fulfil Higher Education Expenses

Education, in India or abroad, has become highly expensive. As a parent, you can take a Personal Loan to cover the higher education costs of your children.

6. Accomplish Travel Goals

People often wait for sufficient funds to fulfil their dream of travel. However, life is uncertain and too short to be spent waiting for the right time. If you are a travel enthusiast, you can simply apply for a Personal Loan to accomplish your travelling goals.

7. Debt Consolidation

A Personal Loan can also be utilised to consolidate multiple loans/debts into one and pay it off. This helps in reducing your debt burden at lower interest rates.

Also Read: Why is a Personal Loan One of the Best Short-Term Loans?

Important Factors to Keep in Mind Before Applying for a Personal Loan

Here are some important things that you must keep in mind before applying for a Personal Loan:

1. Understand Your Funding Needs 

Before you apply for a Personal Loan, it is essential to know how much money you need. Evaluate your financial situation and how much you can afford to borrow. Borrow only what is needed; excessive borrowing can increase the EMIs and may cause unnecessary financial burden.

2. Minimum and Maximum Funding Available

There is a certain limit on the maximum and minimum funding you can avail from a Personal Loan. This limit varies depending on several factors like income level, profession, credit score, etc.  It is advisable to always check for the maximum and minimum Personal Loan funding available.

3. Compare Different Interest Rates

Each lender levies a different interest rate on Personal Loans. The average interest rate for Personal Loans is between 10-30% per annum. Several lending institutions like Poonawalla Fincorp offer Personal Loans at competitive interest rates starting at 9.99%*p.a.

4. Processing Fee

Each lender charges a different processing fee for administration purposes. Comparing the fees across lenders is wise. It is also advisable to apply for a Personal Loan from a lender with the lowest processing fee.

5. Pre-Payment or Foreclosure Charges 

Lending institutions like Poonawalla Fincorp allow you to foreclose or prepay your Personal Loan without any extra charges if paid from your own sources. This helps in reducing the debt burden and interest burden.

6. The Credibility of Loan Provider

When applying for a Personal Loan, choose to borrow from a trustworthy lender. Assess the credibility and reliability of the loan provider before taking a loan. Choosing a credible lender will ensure you are secure against any legal or financial hassles that may arise during the loan term.

7. Availability of Digital and Contactless Processes

Today, Personal Loans are available with just a click and from the ease and comfort of your home. Hence, when assessing a Personal Loan lender, check if they offer a contactless and simple online application, approval, and disbursal loan process.

8. Minimal Documentation

To avail of a Personal Loan, you need to submit several documents. Seek a lender that asks for a minimal hassle-free documentation process rather than a complicated one.

9. Time of Approval and Disbursal

Assessing the approval time and disbursal of the Personal Loan is critical. Choose a lender with a quick and easy loan approval and disbursement process so you can access the funds as soon as possible.

10. Repayment Tenure

The loan tenure has a significant impact on your monthly instalments. The longer the loan term, the lower would be the amount of the monthly instalments. Alternatively, the shorter the Personal Loan tenure, the higher will be the monthly instalments. Before applying for a Personal Loan, check the tenure specifications of the Personal Loan, and preferably, choose a loan term that suits your financial situation.

Also Read: Should You Consider a Personal Loan for Business Use?

Features and Advantages of a Personal Loan

Some of the prime features and advantages of taking a Personal Loan from Poonawalla Fincorp are:

  • High loan amount of up to Rs. 30 Lakh
  • No restrictions on the usage of funds
  • No need to pledge any security or collateral
  • Competitive interest rates starting at 9.99%*p.a.
  • Simple and minimal documentation
  • Quick approval and hassle-free application process
  • Completely transparent loan processing, approval, and disbursal
  • Flexible repayment tenure of up to 60 months
  • No hidden fees or charges
  • Zero pre-payment or loan foreclosure charges
  • Seamless customer support 

How to Get Approved for a Personal Loan

The following are some tips that can help you get approved for a Personal Loan:

  • Improve Your Credit Score: If you have a high credit score of 750 or above, you have a high chance of getting loan approval.
  • Meet the Eligibility Criteria: Check and fulfil the required eligibility criteria of age, citizenship, income, and credit score.
  • Get a Co-signer: Get a co-signer if required to increase your chances of loan approval.

To Conclude

A Personal Loan is a helpful financial tool offering funds for diverse needs, such as hosting a wedding, covering medical expenses, sponsoring higher studies, funding trips, etc. Various lenders like Poonawalla Fincorp offer Personal Loans with favourable terms and conditions. You must review all the terms and policies, such as interest rates, repayment tenure, associated charges, etc., and secure the best loan offer that meets your requirements.

Frequently Asked Questions

  • Can I get a Personal Loan from Poonawalla Fincorp?

Yes, you can easily get a Personal Loan from Poonawalla Fincorp at competitive interest rates with a flexible repayment tenure and a hassle-free application process.

  • What are the purposes of taking a Personal Loan?

A Personal Loan can be used for multiple purposes, such as weddings, travelling, higher studies, medical expenses, etc.

  • Can I get a Personal Loan for a longer period?

Yes, Poonawalla Fincorp offers a Personal Loan with flexible repayment tenure of up to 60 months.  

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Personal Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply

poonawalla fincorp team

Poonawalla Fincorp Team

Our team of expert writers and editors are passionate about providing authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

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