With the festive season around the corner, most of you would like to splurge on buying clothes, furniture, car, bike or even renovate your home. However, fulfilling such desires come at a cost that requires you to have enough funds in hand. While you may consider exhausting your savings to shop your heart out, but is imperative that you keep the funds safe to cater to urgent financial situations and instead avail a personal loan for festive purchases. Read on to know the benefits of using a personal loan this festive season.
What is a personal loan?
A personal loan is an unsecured loan that you can utilize for fulfilling your personal needs. The loan amount can be availed to buy a car, two-wheeler, jewelry, furniture or to cater to any emergency financial requirements. This is a type of collateral-free loan that does not require you to pledge any of your assets and is instead offered based on your eligibility. The loan is usually offered for a tenure of 12 months- 36 months, however, it may vary from lender to lender. Additionally, availing this type of loan is a simple process and does not require you to undertake a lengthy documentation process, such as a personal loan by Upwards.
Benefits of personal loan
No restrictions on usage: Secured loans such as car loans, home loans, two-wheeler loans have to be used for a specific purpose. However, unsecured loan like a personal loan does not have to be used for a particular purpose. Lenders do not question the intent of availing the loan and instead sanction the amount on the basis of your credit score, income, age, and other criteria. You can use the loan amount to go on a holiday, buy gifts for your friends or family or buy jewelry for yourself or even renovate your home,
No collateral: Unsecured loans do not require you to keep any of your assets as security against the borrowed loan amount. This ensures that you don’t have to risk the assets and lose its own in case of non-repayment of the loan.
Ease of application: Festival season being the busiest time of the year, you would surely not have time to visit the lender’s office to get a loan. But online loan lenders now help you apply for a loan easily through their website or app. You can now apply for a loan from the comfort of your home without having to go through any paperwork even. To get a loan online, you simply need to meet the eligibility criteria and the loan is disbursed almost instantly in your bank account.
Flexible repayment options: Unsecured loan is generally offered for a term of 12 months-36 months i.e. you can repay the loan in EMIs within the tenure you select. This is one of the primary benefits of personal loans as you can repay the loan amount with ease without having to strain your monthly expenses. When selecting the loan tenure, it is important to keep in mind that a short tenure attracts high EMI, whereas a longer tenure requires you to pay low EMIs.
Instant disbursal: With instant approval comes instant disbursal that allows you to celebrate the festive season with great joy. On successful loan approval, the loan amount is disbursed in your bank account that ensures your celebrations are not interrupted due to lack of money. Several online lenders like Upwards offer you loan disbursal in just five minutes from the time of loan approval.
Minimum documentation: To get an unsecured personal loan, you don’t have to submit a lengthy list of documents to get approval. You simply have to submit one address proof, one identity proof, and your income documents and you are good to go. Additionally, you can also upload the documents online through the lender’s app or website that further makes the loan application process completely transparent.
Increase your credit score: Opting for a personal loan to fund festive purchases offers you an added benefit of building your credit history and increasing your credit score. Your credit score is an important eligibility criterion that helps lenders assess your creditworthiness. Having a high credit score increases your chances of loan approval, whereas a low score leads to loan rejection or approval at a high-interest rate. Repayment of loan EMIs on time increases the credit score that further helps you get top-up or another personal at low EMI. On the other hand, not paying the loan EMIs on time dents your score.
Availing personal loan for the festive season is the right way to celebrate in style. However, you must opt for a loan amount you can easily pay for. Calculate the loan amount EMI using a personal loan EMI calculator to get an estimate of the EMI you will have to pay each month and only then choose a loan amount depending on your repayment capacity.