Need urgent money? You might consider taking out a small personal loan | India is blooming
There will be times in life when you may need extra money or funds urgently. For example, there may be a medical emergency at home. Alternatively, your home or vehicle might need major repairs, the cost of which could reach hundreds of thousands of rupees. During these times, you may be forced to burst into your savings or investments and meet those emergency cash needs.
However, there is another plan of action available to you in case you need urgent cash for any reason. This involves taking out a small personal loan. You can even use a personal loan calculator to understand how the repayment works and the amount you will have to pay as an EMI for your loan.
What is a small personal loan
A small personal loan is a kind of unsecured loan that you can use for various personal purposes. Generally, the maximum amount you can borrow through a small personal loan is around ₹2 Lakhs. Some banks and financial institutions may also offer small personal loans up to around ₹5 Lakhs.
Like all personal loans, this type of loan is also unsecured, which means that you do not need to provide security to the lender. You can then use the borrowed amount to meet your emergency financial needs.
Thereafter, during the repayment term, you will have to repay the loan amount along with the interest thereon. These EMIs can be easily calculated using a personal loan calculator, which is a free online tool that tells you how much you will need to repay each month. All you need to do is enter some basic information such as the following:
- The amount of the loan contracted
- personal loan interest rate
- The repayment term
Once you have filled in this information, the Personal Loan Calculator will display the amount of EMI you need to pay to the lender during the repayment term. This will help you plan your finances accordingly.
Advantages of benefiting from a small personal loan
There are many benefits you can enjoy when you avail a small personal loan for emergency financial needs. Discover below the main advantages of this type of debt.
●No collateral needed
Since a personal loan is an unsecured loan, you do not need to offer any assets as collateral. Thus, you can benefit from a loan even if you do not have any property in your name, such as a house, a vehicle or jewelry. This makes a personal loan suitable for all types of borrowers, especially when in dire financial need. If you want to pay for urgent medical treatment or any other unexpected expense, you can avail a personal loan without worrying about posting collateral.
● Easy approval
Since a personal loan is an unsecured loan, it is also extremely easy to apply for this line of credit and get approved by the lender. As long as you meet the eligibility criteria set by the bank or financial institution, and if your credit score is high, you will usually have no trouble getting your application approved for a small personal loan. These days, many lenders even offer small instant personal loans, so you can get the amount paid to you without delay.
You don’t have to worry about cumbersome paperwork because the documents required for personal loans are also quite minimal. Generally, you will only need to submit the following documents:
- Proof of identity (such as a copy of your PAN, passport, voter ID card, driver’s license or Aadhaar card)
- Proof of address (such as a copy of your passport, voter card, driver’s license or Aadhaar card)
- Bank statement for the last 3 to 6 months
- Latest payslips or tax returns
There are usually the main documents required for personal loans. Once you have them ready, you can easily apply for a small personal loan.
●Improved credit score
Your personal loan can also help you build a good credit history and improve your credit score. However, keep in mind that this is only the case if you pay your EMIs promptly according to the repayment schedule. If you do, your credit score will improve and it will be easier for you to get other credit facilities later if you need them. But if you delay your EMI payments or don’t make them at all, your credit score will drop.
This is why you need to make sure you are capable of handling your NDEs. A personal loan calculator can help you plan your repayment based on your financial situation. Use this online tool to determine if you have the ability to pay EMIs for the loan you are considering applying for.
● Versatile end uses
Another advantage of small personal loans is that you can use the borrowed funds to meet various types of expenses. Here are the different end uses that a personal loan helps you manage.
- Emergency medical expenses
- Wedding expenses
- Trip costs
- A premium purchase
- A major home, car or bicycle repair
See how a loan can be used for such diverse needs? This is why a small personal loan is a financing option that suits you if you have sudden cash needs.
Now that you know what a small personal loan is and what its advantages are, you will be better equipped to make a decision about whether or not to benefit from this type of loan. If you decide to take out a personal loan, be sure to use a personal loan calculator before applying for the loan. This way, you can plan borrowing more carefully and only borrow what you have the ability to repay. If IMEs are within your budget, you can keep your credit history and credit score in the green zone, while simultaneously meeting your urgent financial needs.