Personal loans are favoured by many for their versatility; they can be used for emergencies, debt consolidation, business investments, up-skilling, and so much more. Used creatively, they can be a massive boon to an individual as well as a business.
In an effort to help our readers make the most of their loans, we will be exploring some of the best features of personal loans.
As the name might suggest, personal loans are personal in that they can be used for almost any purpose, from home renovations to credit card payments, basic living expenses, vacations - the list is virtually endless.
They stand in contrast to other types of loans, such as business loans, car loans, or student loans, that are granted on the condition that the money will be used as outlined in the contract.
Generally, with this type of loan, the main criteria for approval, besides basic eligibility requirements, is demonstrating an ability to repay the loan.
So If you want more freedom and flexibility in how you use the money you borrow, then personal loans are the way to go.
There are mainly two types of personal loans: secured and unsecured; the former requires collateral for loan acceptance, while the latter is generally based on creditworthiness.
Both have their advantages and may appeal to different types of borrowers. For example, a borrower in need of a larger loan quantum or a borrower with a bad credit score may prefer to go for a secured loan.
Meanwhile, those who may not have assets to collateralise can opt for an unsecured loan.
Generally, secured loans have better interest rates due to the lower risk. Still, it is this capacity to cater to different needs, preferences, and risk tolerances that make personal loans a compelling option.
Any individual taking out a loan will prefer to receive the money as quickly as possible. However, most loan applications are gruelling and time-consuming, which is one of the main issues that Lendingpot aims to address.
With that said, by and large, personal loans have a much quicker and simpler application process. Some moneylenders have streamlined this process so well that the money can be disbursed to approved applicants on the spot.
In addition, the requirements for personal loans are often less stringent compared to other types of loans, with less documentation, fewer evaluation criteria and, in general, fewer steps in the process.
Last but not least, personal loans tend to have a greater degree of flexibility in the loan tenure.
A licensed moneylender providing a personal loans might have a tenure of up to 2 years, while a bank might be able to offer an extended tenure, possibly up to 5 years.
This flexibility is useful for borrowers because it gives them options for how to repay the loan, depending on their circumstances and timetable.
One borrower may want to repay the loan quickly in order to get it over with, even if this means higher monthly payments.
Other borrowers – such as new business owners who don’t have much revenue at the moment, but are confident that they will be profitable in the long term – might appreciate longer tenures with lower monthly payments.
Our foremost priority at Lendingpot is to ensure consumers get the financial products they need and deserve.
We connect individuals with banks, financial institutions, and licensed moneylenders through a process that is quick, transparent, fair, efficient, and of course, at no cost to applicants. We measure our success by a job well done.
Learn more about us: our story, values, and mission. Come read our resources on how to budget your paycheck, how to finance a wedding, and other topics. Or visit our FAQ if you have other questions about us and the service we provide.
Are you ready to jump into Lendingpot and find a lender who can provide the financial boost you need? Start your application today!
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