Merits and Demerits of Personal Loans

Firstly, everyone should and must think of certain things before stepping into anything and it equally applies in the case of personal loan too. First to give to guys some hope and get to know about what kind of benefits one gets in their hand when availed for a personal loan are stated as follows,

Advantages or Merits of a Personal Loan

• Personal loans can be considered to be like a blessing and the best choice up to a certain extent for especially the ones who are investments and have the right interest to opt for a large area or number of purchases. This is because they do not have to give up their belongings such as bikes or cars or vehicles or their dream houses as collateral in return for a personal loan. Because personal loans to be granted for the ones in need do not require such collateral to be granting the people with loans, for whatever their investments are.
• And the most common thing to be heard as one of the best benefits or the biggest merits of the personal loan is nothing but the nature to hold the kind of versatility. Yes, personal loans are considered to be the most versatile type of loans one can opt for. This point has come out to be true when compared to the other types of loans such as a student loan, home loan, car loan, etc. This is because when an individual opts for a personal loan, he or she can put it up for use in their educational purposes, house purposes to be fulfilled, or for the travel expenses and everything. Therefore it is known for its versatility.
• Next comes the point to be discussed on the Personal Loan Interest Rates. Well, we know for a fact that when compared to the gold loans, personal loans may slightly bear a high amount or percentage in the rate of interest but they are considered to be decent enough when in comparison to that of the rates being born on the credit cards. And the interest rates of the person are in the terms of the fixed-rate and the borrower's payments on the interest rate is fixed to remain the same without any major changes
• And personal loan offerings are not just subjected to lending institutions such as banks. Yes, you can try to grant yourself a personal loan from anyone like your family or even close friends who you considered to be trustworthy enough. And the negotiations on the rate of interest is also possible in this kind of cases, which might not be possible to a very high extent from the official lending institutions such as banks. For example, the interest rate at Vijaya Bank Personal loan is fixed at 10.75%.

Now, as we have seen the advantages it is time to look and take care while we see the disadvantages or the demerits.

Disadvantages or Demerits of the Personal Loan

• Personal loans might not be in handy for every individual in a point to be noted that, even though as we mentioned the rate of interest might be slightly less than that of the credit cards, but not less than the loans which come to be known as home equity loans, and this point is considered to be noted and taken into concern especially for the ones who bear the poor credit score on their loans. This is because, with a credit score of less than 600, they are expected to have loans at very high-interest rates than usual.
• The processing fee of the personal loans are also high when compared to the gold loans, so these are to be taken care of. 
• Penalties might also be charged in case of personal loans which might be a waste of the borrowers.

Diala Bank Member since September 2, 2020