benefits of taking a personal loan over other types of credits

personal loan over other types of credits

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Lending is an essential part of human life. It is rare to have enough funds at all times to be able to meet all your immediate needs. Most people resort to one or the other credit to meet the needs of the fund. An urgent need for funding may arise for a number of reasons, some of which are covered below.

personal loan over other types of credits
personal loan over other types of credits


Laying down the deposit

Pay the fee

Buy a gadget or device

Going on a dream vacation

Wedding and honeymoon expenses

Home renovation

Investment opportunity

Medical emergency

Personal loans have become a very popular mode of short-term lending in recent years because of the speed, simplicity and convenience that they offer without the hassles associated with other forms of credit.

What makes a personal loan a better option than other forms of lending?

To understand this, we have to start with the definition of personal loan.

What is a personal loan?

A personal loan is an unsecured or collateral-free loan that can be obtained for any purpose which means there is no need to mortgage any property against this loan. This makes the product very popular among millennials who are on their first job and have no assets to mortgage.

What are the different types of credit available to the borrower?

There are various forms of credit available in the market. You have secured loans like home loan, auto loan, education loan, business loan etc. Bank overdraft is also a line of credit. Apart from this you have a credit card which can be used for any purpose. Unorganized lending from lenders is also a range of loans available to borrowers.

Why are personal loans considered better than other types of credit?

Personal loans have become more popular because they offer different benefits compared to other lines of credit.

No collateral - the freedom not to mortgage any property makes it easier for many borrowers to apply for a personal loan. This is one of the main reasons why personal loans have become an option for short-term lending.

Convenient user interface - Fintech lenders have created a seamless platform with the help of new age technology which makes the process of getting a loan much easier. You can withdraw cash from the app without moving your seat or talking to anyone.

Quick disbursement - Personal loan is provided within 24 hours which makes it a very convenient option even in case of emergency.

Minimal Paperwork - Traditional loans involve a lot of paperwork which makes the process very cumbersome. Online personal loans include a fairly minimal amount of paperwork. Some mandatory documents like PAN card, Aadhar card, bank statement and salary slip need to be uploaded.

There is no human intervention - online personal loan is a contactless experience. You can complete the process on the platform without any human intervention. It's a simple, automated process from start to finish.

Cheaper than credit card / unorganized credit - Credit cards are only good if you pay off on or before the due date. Otherwise they charge 2-3% per month on the outstanding amount which works up to 24-36% annually. Unorganized lending is offered at exorbitant rates. Compared to these options, personal loans are much cheaper at 11-20%.

Structured Repayment - Unlike credit cards where you have the option to kick the cane on the road and let the amount snowball, a personal loan is a short term loan and requires timely repayment of EMIs. This ensures financial discipline and the borrower will need to find a repayment plan before taking advantage of the personal loan.

Versatility-Personal loans can be used for virtually any legal purpose, so they are much more versatile than secured loans that are generally purpose-specific.

Simple Eligibility Criteria - Most lenders offer individual loans based on very simple eligibility criteria that can be met by most target groups.

Fits into a monthly budget - Personal loans are usually taken for a short period. You can choose a convenient period that ensures that the EMI fits comfortably into your monthly budget.

24/7 Access - Online Personal Loans enable borrowers to access funds 24 hours a day, unlike traditional loans which have restrictions on bank hours and bank holidays. This makes it as good as a cheap credit card because you can get funding for all your needs at short notice.

As you can see, personal loans outweigh other forms of credit on every parameter.

What makes a person eligible for a personal loan?

On LoanTap, anyone who meets the following criteria can apply for a personal loan -

He is an Indian citizen or resident

He is over 21 years old and under 60 years old

His monthly income is Rs. More than 30,000

How easy is the personal loan process on LoanTap?

LoanTap has a very robust integrated platform that is available on the website as well as on the mobile application from which it can be downloaded. Lending is an indispensable part of human life. It is rare to have enough funds at all times to be able to meet all your immediate needs. Most people resort to one or the other credit to meet the needs of the fund. Urgent funding needed for a number of reasonsInterests may arise, some of which are covered below.

Laying down the deposit

Pay the fee

Buy a gadget or device

Going on a dream vacation

Wedding and honeymoon expenses

Home renovation

Investment opportunity

Medical emergency

Personal loans have become a very popular mode of short-term lending in recent years because of the speed, simplicity and convenience that they offer without the hassles associated with other forms of credit.

What makes a personal loan a better option than other forms of lending?

To understand this, we have to start with the definition of personal loan.

What is a personal loan?

A personal loan is an unsecured or collateral-free loan that can be obtained for any purpose which means there is no need to mortgage any property against this loan. This makes the product very popular among millennials who are on their first job and have no assets to mortgage.

What are the different types of credit available to the borrower?

There are various forms of credit available in the market. You have secured loans like home loan, auto loan, education loan, business loan etc. Bank overdraft is also a line of credit. Apart from this you have a credit card which can be used for any purpose. Unorganized lending from lenders is also a range of loans available to borrowers.

Why are personal loans considered better than other types of credit?

Personal loans have become more popular because they offer different benefits compared to other lines of credit.

No collateral - the freedom not to mortgage any property makes it easier for many borrowers to apply for a personal loan. This is one of the main reasons why personal loans have become an option for short-term lending.

Convenient user interface - Fintech lenders have created a seamless platform with the help of new age technology which makes the process of getting a loan much easier. You can withdraw cash from the app without moving your seat or talking to anyone.

Quick disbursement - Personal loan is provided within 24 hours which makes it a very convenient option even in case of emergency.

Minimal Paperwork - Traditional loans involve a lot of paperwork which makes the process very cumbersome. Online personal loans include a fairly minimal amount of paperwork. Some mandatory documents like PAN card, Aadhar card, bank statement and salary slip need to be uploaded.

There is no human intervention - online personal loan is a contactless experience. You can complete the process on the platform without any human intervention. It's a simple, automated process from start to finish.

Cheaper than credit card / unorganized credit - Credit cards are only good if you pay off on or before the due date. Otherwise they charge 2-3% per month on the outstanding amount which works up to 24-36% annually. Unorganized lending is offered at exorbitant rates. Compared to these options, personal loans are much cheaper at 11-20%.

Structured Repayment - Unlike credit cards where you have the option to kick the cane on the road and let the amount snowball, a personal loan is a short term loan and requires timely repayment of EMIs. This ensures financial discipline and the borrower will need to find a repayment plan before taking advantage of the personal loan.

Versatility-Personal loans can be used for virtually any legal purpose, so they are much more versatile than secured loans that are generally purpose-specific.

Simple Eligibility Criteria - Most lenders offer individual loans based on very simple eligibility criteria that can be met by most target groups.

Fits into a monthly budget - Personal loans are usually taken for a short period. You can choose a convenient period that ensures that the EMI fits comfortably into your monthly budget.

24/7 Access - Online Personal Loans enable borrowers to access funds 24 hours a day, unlike traditional loans which have restrictions on bank hours and bank holidays. This makes it as good as a cheap credit card because you can get funding for all your needs at short notice.

As you can see, personal loans outweigh other forms of credit on every parameter.

What makes a person eligible for a personal loan?

On LoanTap, anyone who meets the following criteria can apply for a personal loan -

He is an Indian citizen or resident

He is over 21 years old and under 60 years old

His monthly income is Rs. More than 30,000

How easy is the personal loan process on LoanTap?

LoanTap has a very robust integrated platform that is available on the website as well as on the mobile app that can be downloaded from.

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