Emergencies often come at the moment when you least expect them. Whether it be medical, home and car repairs, or even the need for a cash infusion in your business. Personal loans are the types of loans meant for personal use. Generally, they are unsecured, which means borrowers are not required to give collateral.
They’re very convenient loans and their popularity increases day by day. Unlike other types of loan, it is so easy to be approved and that’s one of the reasons why they’re highly preferred. The whole application process in some institutions, such as Bugis Credit is so easy. There are different conditions that one can face and a personal loan is almost always accessible to most people.
Why have personal loans become so popular? Let’s take a look:
1. Lower waiting periods when funds are needed
Some businesses, especially new ones may not meet the standards required to be approved for business loans. When extra funds are needed, owners may consider a personal loan. For instance, as the business scales up, it may become increasingly necessary to improve production in order to meet customers’ demands. Besides, it requires a lot of funds to start serving new markets.
2. Lower interest rates
Usually, you have to pay for using borrowed money — Ie., interest. Compared to business loans and mortgages, personal loans cost less. Before applying for a loan, rational borrowers shop around for lower rates. At the moment, lenders are charging lower interest rates, something that has lured consumers to keep borrowing over and over again.
The internet has made things much easier these days. Borrowers can search for interest rates and do comparisons online.
3. There are a variety of types of personal loans
Banks and other money lending institutions offer different types of loans. The determining factors include the income level along with employment status. This means nearly all consumers can find relief whenever they’re faced with a financial crisis. In fact, there are different classes of borrowers as well as pensioners.
More and more options keep emerging as time goes by. With this trend, the popularity of personal loans will keep on increasing.
4. Easier approval
This yet another attractive feature of personal loans. The application requires less documentation compared to other categories of loans. In fact, with the advancement in technology, the time is coming when the whole process will be paperless. At the moment, some banks use ATMs to provide personal loans to those who meet requirements.
5. The application process has been made easier
Gone are the days when banks and other lending institutions would critically examine loan applications. In most cases, lenders used to require extra proof that the loan will be repaid. But today things are very different. In order to attract more clients, lenders are doing their best to ease the application process. Interestingly, lenders are trying to help borrowers fine-tune their application and enhance their eligibility criteria.
Borrowers no longer have to be subjected to tedious application processes in order to be approved for loans. In fact, it is possible to apply for loans even while at home.
6. Ease of funding and an growing interest in entrepreneurship
The number of individuals turning to entrepreneurship is increasing each day. For this reason, there is more need for funding. Many people often go to venture capitalists and angels, but in most cases the outcome is negative. As a result, many business people turn to personal loans where they can easily borrow and finance their business. What is more, there has been a significant increase in the market for these types of loans.
Sometime back, only individuals who were well established financially could get into giving out personal loans. Today, even small-scale lenders are in the business and this has enhanced the popularity of the industry.
7. Repayment is quite flexible
There different payment forms including Standard Instruction (SI) and Net Banking. Again, you don’t have to spend a lot of time queuing in order to repay the loans like it used to be before.
Conclusion
There are so many factors that have contributed to the popularity of personal loans. We have considered 7 reasons here. As days go by, the popularity of personal loans will keep on increasing. The future is going to be brighter. However, do not be tempted to borrow more than you can afford.