Personal finance scheme is the most readily available loan. One need not waste time in collecting any proofs, documents or interviews. However, applying for a personal loan is not recommended by finan…
Personal finance scheme is the most readily available loan. One need not waste time in collecting any proofs, documents or interviews. However, applying for a personal loan is not recommended by finance experts due to high rates of interests, which makes them too costly to repay back.
Although not many circumstances demand availing of such a credit, but one can never discard it as useless. If one has pending principle amount on which the interest rate is higher than that of personal finance scheme then considering this is a good option. It will help in saving money since it helps in lowering down the interest rate on the principle amount.
It may also find its utility in pending or defaulter cases of huge credit card bill payment. The interest rate on unpaid credit card balance increases steeply with time. It is better to pay the amount rather than to delay it any further. The payment of this amount will come out to be cheaper in such a scenario.
When the principle amount is high, repaying it at one go is tough. There is an option of paying the mandatory minimum balance, but it only increases the credit amount due to interest being implied. Further, it stretches the time even more and makes it more costly to repay. The repayment through the bank credit of this type will help in earlier payment and installments would be considerably lower than the one from credit card bill. It will also aid in hassle free usage of the card.
Another field where this facility is very useful is for higher education. The fees for professional courses are quite high and mostly people take education loan. When there is an urgent requirement of money and it is difficult to submit the admission proof or you do not wish to mortgage your property this loan is helpful.
They are quite helpful when you are not able to manage sufficient cash. You can even avail them for purchasing consumer durables. However, before that one should have a clear idea about the advantages and disadvantages of it and decide accordingly.
The ultimate advantage concerning this finance scheme is that no security deposit is required. One needs to fulfill all the criteria of eligibility. It is an instant credit scheme and can be availed in times of need. The time for which this option can be availed is five years. Picking up money from local market at higher interest rates is not recommended in lieu of such facility. The best part would be the absence of any broker throughout the process. It is also available for financing your much awaited holidays.
There are few drawbacks with this type of finance scheme. The actual eligibility requirements when applying for a personal loan is usually stricter compared to others. The banking institutions are at a greater risk during this kind of financial loans. Therefore, these people stick to specific types of debtors. Always consider the interest rate and the prepayment charges before applying.
Article Tags: Personal Loan, Finance Scheme, Interest Rate, Credit Card