Financial deficiencies – a state not favoured by most, yet encountered by all at some point in their lives. Consequently, such situations demand immediate economic rejuvenation and in most cases, a loan emerges to be the viable option.
The earlier days saw cash crunches mar individuals through the hands of loan sharks and their exorbitant interest rates. However, today, owing to the presence of reliable lending institutions and their offerings of a personal loan, the story witnesses a different path.
So, today, let’s check out the best and worst options for borrowing money when faced with such a situation.
Pawn shops (A big no-no!) –
Truth be spoken, pawn shops, with their unreal interest rates ranging from 40% to almost 60%, are perhaps the worst option of sufficing your financial deficits. Additionally, they offer considerably brief loan repayment tenors, thereby, stiffening up your pockets further.
Again, loans availed from pawn shops are secured in nature, thus, mortgaging or hypothecating an asset becomes an imperative task. However, coupled with the high interest rates and a stiff repayment period, this does not appear to be a favourable option.
Credit card cash advance –
Next in the line is the well-known way of swiping your credit card for a lump sum amount. While you may be confident of paying the dues within the stipulated time, take note of their interest rates which vary between 13-15%.
Moreover, if borrowed before the 10th of a month (date of credit card bill generation), you will need to pay the dues within the last day of the same month. So, think before swiping!
Personal loan –
These are secured loans borrowed from banks or financial institutions which provide you with the independence of using the amount for any purpose of your choice. Additionally, availing a personal loan from lending organisations also comes with their pre-approved offers.
These offers on home loans, personal loans and other financial services not only save considerable time but also ease out the process of availing financing. All one needs to do is provide a few basic details and check out their pre-approved offer.
In fact, these institutions also offer the following benefits:
1) Flexible repayment tenor:
One can choose to repay the borrowed amount conveniently with tenors ranging from 12-60 months. He/she can borrow only the amount required, pay the interest incurred as EMIs and repay the principal amount when the loan tenor terminates.
In this respect, a EMI calculator can aid one in calculating one’s precise repayable amounts.
2) No mortgage or hypothecation required –
Being unsecured, these loans are devoid of any collateral requirement. While that wades off the possibilities of losing out on one’s property, it brings the need of a minimum credit score of 750 to the foreground.
3) Documents and eligibility –
A hassle-free personal loan verification process will require an applicant to present his personal loan documents which include his/her employee ID card, KYC documents, salary slips for the last couple of months and 3 month’s bank statement of his/her salary account.
Considering personal loan eligibility, a person must be between 25 and 58 years of age. He must also be a salaried resident of India (with an MNC, private or public sector).
Thus, owing to the flexibility of usage, personal loans can be a viable option of countering one’s financial deficiencies. Moreover, lending institutions like Bajaj Finserv provide their applicants with competitive Personal Loan interest rates which can be calculated using an online loan calculator.
So, irrespective of whether you are looking to meet your monthly ends and contemplate your business requirements, personal loans can prove to be an affordable option. Hence, apply for personal loan and forget the days of a cash crunch.
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