Many people think that having debt is a bad thing to have. Well that is not true. If you borrow money from a bank, family, friend or credit card means that you need it for your future. Then if you can repay the money you borrowed along with its interest, its goes to show that you’re responsible enough to handle all your finances.
Through personal loans, you can now consolidate all your debts into an account with much lower interest. The money from personal loans can also be utilized for books, repairs, car repair, home improvement and bill payments. The bottom line for this is that personal loan is not always bad.
Personal loans are always the best option for people who wanted to have instant cash because it doesn’t require any collateral.
Here are some factors that are proving that personal loan is not always bad.
- It has lower interest rate. Even though this type of loan comes with a much higher interest rates than that of the secured loan that requiring the borrower to present collateral, the rates are much lower than credit card interest rates. There are also times that personal loans can obtain lower interest rate compared to payday loans. For you to have a lower interest rate you must have a good credit rating.
- Flexibility. Personal loan’s primary purpose is that the borrower can use the money freely and can also be used for different purposes. There are lenders who will ask the borrower to where they will use the money for them to decide if they will grant the personal loan application. Many money lenders would grant applications for several reasons like buying gifts, home improvement, travel and vacation and many more. One thing to keep in mind is that you should avoid debts and be aware of the conditions given by lenders.
- Easy qualification. If the borrower already has an account on the bank where they want to apply for personal loans then that is a good thing to have. Since they have all your information and past transaction history they are now easy for them to process your loan application. It is a good thing for borrowers to have a good relationship with their banks for easy approval but there are several banking institutions too that only focuses on the eligibility of the borrower and not their record on the bank. This is one security measure of them.
- It is less risky. Since there is no collaterals asked, you can be assure that your home, car, jewelries and other worthy things are safe. You have nothing to lose as they say but that doesn’t mean that you are 101% free from financial repercussions once you failed to repay the money lender. You will still face some financial problem and legal trouble but your assets cannot be taken away from you.
- Financial Freedom. Personal loan can give you financial freedom. It means you can use your money in whatever way you want to spend it like paying existing bills, home improvement and anything just to let you go back on the right track. So, it is very important that you allocate the funds and use them for the right things.
Personal loan is not always bad for as long as the borrower will not use the money for worthy things.