When we face a financial crisis there various ways by which you can sort them out by taking a quick personal loan. It could be for anything from paying credit card bills, education, marriage, traveling or any other expenses. With little to no paperwork, these loans are received instantly making it quite useful at the time of need. These loans can be easily paid back by giving monthly installments over a period of time. So, for any crisis that demands financial solutions, these loans can be quite handy.
Different types of loan to look for
Personal loans come with many options that you can explore, like secured and unsecured, one with collateral and the other without any collateral.
Peer to peer lending platforms are a digital space for borrowers and lenders to meet & transfer funds accordingly. There is no interference of any middleman, you can fill out an application and get your documents verified at ease. This whole process is done online, after verification, terms are decided and the loan is instantly approved.
In debt consolidation loans, all your ongoing small loans are combined into one common loan thus making it easy to pay off. And if you have a poor credit score then you can choose to co-sign loans which mean you can introduce another person into terms who will share the burden of paying back in case you fail.
Features of a good loan
The interest rate – The most important thing to look for is the interest rate, and the best ones are low rate ones. The rate charged by institutions should be able to cover the operating costs, administrative costs and has an acceptable rate of return.
No security – These loans are unsecured, which means you don’t need any collateral against taking a loan, this works when you don’t have any assets to pledge. The other option is going for secured loans where you require putting some kind of security in exchange for the loan. The benefit of such loans is that you don’t need to have good credit scores.
Less documentation – Process of taking loans should be simple and instant, which means in case of any kind of emergency it should be readily available. But with the internet these days, you can avail them sitting in the comfort of your home. Nowadays every process is done online, like peer to peer lending.
When you take a loan from the bank, it’s more secure and also has all your details already which reduce verification time. At certain banks, it’s easy to get a loan online and the P2P process follows exactly.
The time period – The most important thing in choosing a loan is looking at tenure period which means time allotted for repaying back the loan. Longer tenure means lower monthly payments because the amount will be divided according to the time, so choose bank or options according to tenure that suits your loan needs.
Loan amount – Seeking loan you have to understand how much amount will be passed, like if you want a loan for 10 lakhs and the upper limit is only 5 lakh then there is no point for going to that option.
The fee charged – The amount that has to be paid back depends upon interest rate and the process. See which determines the total cost that has to be paid back through monthly installments. Low fee means low loan burden.
With low-interest rates, predictable monthly payments, online process and instant transfer of money taking a loan is a good solution for your problems but with the requirement of good credit score, this can be difficult for some people.
