Personal Loans are arguably the one-size-fits-all solution for all urgent and uncategorized needs for money. Unlike specified loans – like a home loan or an auto loan – these loans are usually unsecured, which essentially means that you can get them without any collateral and the money can be utilized for any purpose. The flexibility in terms of utilization of the loan is what makes it so attractive – put them on covering wedding expenses, to fund your foreign travel or any contingent expenses which may come your way.
In addition to being easy to get, they are much more economical as compared to borrowing via a credit card, as there is a difference of almost 2x in their interest rates. Plus, credit card debts adversely impact your credit score and also are subject to a credit limit, which is highly variable, and likely annoying. You don’t want to run out of money on a foreign trip or in the middle of a wedding shopping spree, do you?
Tapping on the growing need for personal loans in contemporary times, Several banking and non-banking financial entities have made the process of getting personal loans simpler and in some cases, instant. Some of the popular avenues that you can explore to get a personal loan are mentioned below:
Through a Commercial Bank
All traditional banks have the option of granting personal loans to existing clients as well as new ones. The reach of these banks is much more than any other institution. In fact, more bank accounts have been created in India in the last year than all the bank accounts in the US.
Most of the banks follow a set pattern for the application process of the personal loan. Almost all provide various different plans depending upon factors like the amount of the loan, the duration, previous credit history, nature of the loan among others. Earlier, most of the banks had a tedious process for this which involved a mountain of paperwork and other formalities.
However, in recent times, they have simplified this process to a large extent and have created a single-window application process. They have even moved forward from all the paperwork and allow getting the personal loan using net banking, through the Bank website or the ATM, sitting comfortably at home. An example of this is HDFC or SBI Saral Personal Loan.
Through a Cooperative Bank
Even though these banks operate at a smaller rate and have a comparatively smaller user base as compared to commercial banks, most cooperative banks have the provision of granting a personal loan. The benefit of availing a personal loan from such a bank is that the formalities are simplified, as they are regulated by RBI and work for giving additional benefits to the society instead of being run for a profit motive. Also, as opposed to commercial banks, their average interest rate lies between 14% to 18%. Additionally, the processing fee is fairly low in such personal loans.
However, there are certain shortcomings attached to taking a loan from these banks. They are:
- More often than not, these are only available to targeted groups like women, MSMEs, or agriculturists.
- The maximum limit of loans is also significantly lower ie. usually only up to 5 lacs.
- A personal loan application is valid as long as you are a member of that cooperative, which means you have to buy the shares of that particular bank.
- They have a restricted number of options that one can avail
However, owing to the less stringent regulations, getting a personal loan from these banks is an attractive avenue, especially in case you want a small loan or if you are in a rural area. Some of the popular cooperatives offering personal loans are Abhyudaya Bank and Saraswat Cooperative bank, among others.
Rapid advancements in the India fintech sector has enabled a whole new market of personal loans in the country, while simultaneously taking the entire banking industry by storm. In fact, it is touted that in due course of time, it’s argued that Indian fintech may give conventional banks a run for their money, pun intended.
The reason for their growing popularity is simple. Fintech offerings personal loans:
- Are easily accessible,
- Give you a loan at a great interest rate,
- Are quick, with rapid disbursement right into your account.
All of this, without making you run from pillar to post. What’s not to love? Even Todd Nelson, senior vice president of online lender LightStream agrees when he says “There’s no need to go to a bank branch, fill out paperwork, then wait to get an answer and finally receive your funds. You can get a loan at your convenience via a computer, tablet, or smart device.”
The Indian market is swarming with these portals giving instant personal loans at a simple click. They are collateral-free and require next to zero formalities for the disbursement of personal loan. It is important to make a wise and important choice when you are spoiled for choices with lenders like EarlySalary and others. You can check out the best money lending app in our previous post.
EarlySalary is one of the market leaders on personal loans in the country, with great features such as a flexible repayment option, instant loan disbursement, and incredibly low-interest rates to name a few. There are a number of additional advantages EarlySalary offers that your bank just won’t. So, log into EarlySalary and put an end to your money woes now!
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