Personal loan is an unsecured loan, where there is a no need of collateral for borrowing. Loan is offered on the basis of your credit. With good credits, your chances of obtaining personal loan at low interest is high.
Reasons why personal loans are appealing
Flexibility of end-use
Unlike, several other kinds of loans [home loan or car loan need to be used for purchase of property and vehicle], you are not limited to use personal loans. They can be used for any purpose borrower wants like wedding, home renovation, vacation, starting new business, etc.
Low interest rate
With good credit, you can get personal loans with low interest rates in comparison to credit cards. On credit card balance, you need to pay 15% APR. Alternatively with good credit score, you can qualify for personal loan with 6% APR. If you are investing in something big then this makes a huge difference.
If you don’t get 0% APR intro rate on credit card or are aware that you will not be capable to pay loan prior intro rate expires then consider to apply for a personal loan.
Personal loan with low interest rate can be used to merge debt with higher interest. You can use a single large personal loan to settle small high-interest debts like credit cards or student loans.
Debt consolidation will save interest money and settle your past dues quickly. Several loans can be merged under one umbrella. It will save the struggle and effort in handling each debt payment schedule. Merging under a single umbrella helps to manage debt repayment in a better way as well as save money in due course.
Smooth cash flow
Business owners can use personal loans can be used as bridge for temporary gaps. For example, if you are aware that a client’s payment might get delayed then a personal loan is handy. It means you will not need to swoop the emergency funds. Line of credit with bank helps to smooth cash flow. It can be re-paid, before interest gets charged.
Enhance credit score
Personal loan is installment loan, whereas credit cards are revolving loans without any repayment term. So swapping credit card dues for personal loan helps to lower use of credit and diversify debt types.
Visit Argent direct loans website to understand their easy and quick personal loan approval process. It is totally safe and you can reimburse the loan conveniently.
Factors influencing personal loan approval
Credit score of more than 750 is best for personal loan eligibility. Higher score means greater chances of getting approved.
Employment is another vital aspect for loan-approval process. As collateral is not needed in personal loans, lenders want to ensure that the borrower has a stable job over loan period. Therefore, it is really good to be with same employer for minimum one year prior applying for personal loan.
Annual income also counts as lenders will desire for assurance that you earn sufficient income to make scheduled repayments. High income means good chances to get approval.
Your EMI repayment record will be evaluated to find out your financial discipline and timely EMI payment pattern. Obviously, regular payments and fulfilled debt obligation will be more favorable, while viewing the loan application.
Consider other options, before borrowing. Even though personal loans are beneficial, you are really paying interest.