The COVID-19 pandemic has resulted in financial distress for a lot of people. Job loss, pay cuts, medical expenses have strained the finances of many families across the world. Personal loans offered by banks and NBFCs can help deal with the financial crunch.
Have you received messages or seen advertisements about instant personal loan offers and are wondering if it is the right time to apply for a personal loan or not? Read on and decide for yourself.
Personal Loan: Apply After Careful Thought
Personal loans offer you financial respite in times of a crunch; however, bear in mind that they are expensive. Do not get tempted to apply for a loan just because they seem to be available readily. As we said, these are uncertain times; you need to assess for what you need the loan before you apply for one. Apply for a personal loan only when you have exhausted other options like dipping into your savings or borrowing from your employer etc.
You have to repay the loans as per the agreed terms. Keep in mind that you will have an additional financial burden every month as you will have to pay the loan EMI. If you are facing financial difficulties or are cash strapped due to some medical emergencies, then instant personal loans offer you immediate assistance.
You can opt for a personal loan to take care of essential expenses but, taking a loan for luxury items or vacation is not a good idea in the current scenario. Some banks and NBFCs have tightened their norms for personal loans as they want to reduce loan defaults. If you have a good credit rating and have the required documents, you will not have trouble getting a loan sanctioned.
Choosing the Right Lender
Many lenders offer personal loans; you have ample choice. Research well and choose the right lender. Personal loans are unsecured loans; interest rates charged on them are higher when compared to other loans. If you have been a responsible borrower in the past, you can get a loan at more favourable terms.
Rates vary across lenders; the rates may range from 10.5% to 24% annually. Banks and NBFCs offer differential rates to applicants based on their customer profiles. When you shop around for a personal loan, compare interest rates, processing fee, turnaround time, and the loan tenure.
Applying for a loan at a bank where you have an account or where your organisation has a tie-up can also help you get a personal loan at lower rates. It is a good idea to approach a bank with whom you already have a relationship. You will be able to get your loan application processed faster with them. Most lenders also offer online personal loan facilities; in pandemic times, you can get a loan from the comfort and safety of your home.
Instant personal loans can come to your rescue in times of any emergency or financial crisis. You need to make sure that you choose the right lender, borrow only as much as you can repay comfortably, and take a loan only when necessary.