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An individual can have many different types of financial needs. They can range from requiring money for a medical emergency to requiring funds for marriage, house renovation, family-vacations, higher education, etc.In such a situation, borrowing funds from friends and family can be stressful and disorganized with a high probability of being deceived. A more organised, convenient, and faster method in these times is to take a personal loan to procure the required amount. Many top banks and financial institutions offer personal loans to people who are in urgent need of money.
A list of personal loan benefits:
1. No collateral or guarantor required:
2. All-purpose loan:
3. Simple documentation and easy disbursement:
4. Easy repayment options:
5. Fixed-Rate of interest:
6. Tax saving:
- A personal loan is an unsecured loan. You are not required to provide any collateral security in the form of property, gold, shares, or any other asset in return for the loan. You do not require someone to sign as your guarantor, either. Bank statements or salary slips, and a good credit score are all you need to get a personal loan.You are not required to specify the reason for taking the loan, and you can use the money as per your convenience.In comparison to other loans, personal loans offer a quick and straightforward disbursal process. Lenders ask for basic documents such as your ID proof, address proof, and income statements. Post-approval, the loan can be disbursed in your account in 2 to 3 days. If you apply for the loan online, your loan can also get sanctioned in a couple of hours. The procedure is even faster for pre-approved applicants.Another personal loan benefit is that you can easily pay back the loan amount in easy Equated Monthly Instalments or EMIs. You can choose your loan tenure depending on your income, convenience, and ability to settle the loan. The duration typically ranges from 1 to 5 years.Many banks provide a fixed rate of interest on personal loans. This means that for the entire loan tenure, the rate of interest on which the loan has been approved will remain the same. It does not get affected by the fluctuations in interest due to changing market conditions.Of all the personal loan benefits, tax saving is the most advantageous. You are eligible for a tax deduction of a maximum of ₹2 lakhs under Sections 80C and 24B of the Income Tax Act. However, the loan should have been taken to renovate your home, construct a residential property, or to cover the down payment to purchase a home. If you have taken a personal loan to invest in your business, then the interest paid for the loan is eligible for a tax deduction.
DISCLAIMER
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.