Here’s Why Personal Loans are Better than Secured Loans

While there are multiple loans in the market such as home loans, auto loans, etc. personal loans seem to be the go-to option for most people who need financial assistance. 

Wondering why? 

Let’s take a look.

Personal Loans – The Better Option?

1. No Need for Collateral

There are two types of loan based on the need for security – secured and unsecured. Unsecured loans such as personal loans do not need collateral which means that you can apply for a loan at any time without worrying about providing an asset. 

In case of secured loans, if you do not repay your loan, your asset can be seized and sold to make up for the debt. Additionally, not everyone will have an asset to pledge. This is why unsecured personal loans are a great option for everyone.

2. Can get Loans Immediately

Most loan requests come on a time crunch, i.e., when individuals need urgent financial assistance. 

While secured loans come with relatively lower interest rates, the time taken for verification and approval can range between a few days to a couple of weeks making this the wrong choice for emergency situations. 

Personal loans on the other hand are unsecured loans and will be approved quickly. Lenders such as Money View offer personal loans within as quickly as 24 hours.

3. Flexible Loan Amount

There is a misconception that loans should be taken only if your financial requirement is high. This is far from the truth. Everyone’s needs are different and loans should cater to every requirement. 

This is why personal loans are perfect whether you need Rs. 5,000 or Rs. 5,00,000. Secured loans do not offer this flexibility as the minimum amount itself can start as high as Rs. 1,00,000.

This is also the case with the repayment tenure. Longer the tenure, higher is the overall interest amount paid. Personal loans offer a repayment tenure starting from just 3 months upto 60 months making this a more economical option.

4. Credit Score Requirements

Your credit score is a significant factor that decides your eligibility for every credit-based product. Higher the score, better are your chances of getting the loan of your choice at competitive rates. However, it is not easy for everyone to have a CIBIL score of over 750. But even if your credit score is on the lower side, your access to credit should not be blocked.

Secured loans come with stringent eligibility criteria and therefore those with lower credit scores will not be able to access them. Personal loans on the other hand are given to even those whose scores are relatively lower. Lenders such as Money View offer loans to applicants whose CIBIL scores are 600 and above. These loans can then be repaid on time which will also help increase the borrower’s credit score.

Final Thoughts

Personal loans are popular for a number of reasons – quick disbursal, flexible loan amount, and easy application process. Unlike secured loans, one does not have to provide collateral either. 

However, the right loan will also depend on your needs and requirements. For example, do you need a relatively low amount for an emergency bill payment? Then personal loans are your best bet. 

And for the best personal loan offer, visit the Money View website or download the app and apply today.