Advantages and Disadvantages of Personal Loan
As I analyzed few things about personal loans from my friends’ experiences, I wanted quickly update you on the personal finance side.
What are the advantages and disadvantages of a personal loan?
Advantages:
- The main advantage is the flexibility of using the money for whatever purpose you intend.
- Secondly personal loans are usually unsecured which means you don’t have to offer security or obtain a guarantor.
- Finally there is less paperwork involved since the bank doesn’t have to verify assets used to secure the loan which also means that these loans are approved more quickly.
Disadvantages:
- The disadvantage is that these loans are relatively difficult to obtain
- The qualifying criteria are stricter than for other loans.
- The rate of interest is also higher than for most other loans and may be as high as 25 per cent particularly if your credit profile is weak.
Keep this in mind while obtaining one from any of the lending agencies.
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