Advantages and disadvantages of personal loans
The life of modern people cannot be imagined without additional costs. The World Wide Web has become so commonplace that it is even now possible to get borrowed funds without leaving home.
It allows you to solve many problems if suddenly you don’t have the necessary amount of cash on hand, and there is no one to borrow from, or if you don’t want to borrow at all. Various types of loans, including personal loans, always come to the rescue. Today we are going to talk more specifically about the pros and cons of personal loans.
Staff owe their high standards to the fact that they have many advantages. They play an important role in the hectic pace of life of a modern person.
Benefits of personal loan
- the speed of processing a request for receipt of funds: it takes 5 to 15 minutes, less often up to half an hour;
- the decision is made either in the form of an SMS or by calling a bank or a microfinance organization offering a personal loan;
- the minimum package of documents required: as a rule, this is a passport. Sometimes they ask to write a number or take a picture of a bank card;
- no need to go to the office of a bank or an MFO if the loan is taken out online: it saves you time and you do not need to stand in line.
Minimum requirements for potential borrowers:
- US citizenship, 18 years and over;
- Permanent residence permit;
- Sometimes you may need a stable source of income. However, microfinance companies are not always interested in granting you a personal loan;
- Large percentage of approval of application: Online personal loans are given to huge numbers even to people with blemished credit history;
- Many convenient ways to get a personal loan: money transfers, bank cards, e-wallets and sometimes a phone number.
- Transparent and understandable terms. Only in an MFI, you will immediately know how much it will cost to obtain a personal loan. Nothing could be simpler to imagine. You enter the amount and duration required on the site to see how much will be the overpayment. Even before the loan is issued, you will know the amount of all payments;
- You can get instant loan or cash at https://directloantransfer.com/instant-cash/ even with imperfect credit history. The most common reason for denial is information from your credit history. In the past, many citizens have had problems repaying their loans and borrowings. Banks often turn away such customers. MFOs, on the contrary, know how to work with them by issuing a personal loan without any questions.
- The ability to correct bad credit history. Another advantage of MFIs related to credit history is that small loans can be used to correct it. If you have an imperfect credit history, you probably won’t be able to get money from a bank but from an MFI. After receiving and repaying several loans on time, the chances of getting a large amount from the bank will increase and this will positively affect your credit history.
- Simple repayment scheme. For personal loans, the repayment schedule is as simple as possible: after the expiration of the term when using a personal loan, or sooner, you must return the entire amount at once. That is, what the client received from the MFI and accrued interest. In verified MFIs with good loan terms on the first personal loan, there is no such interest. The borrower returns the same amount that was received.
It’s hard not to agree with the importance of the benefits of a loan that includes a personal loan. However, everything has a flip side. This has not spared personal loans issued online.
Disadvantages of the personal loan
It should be said right away that the presence of gaps in personal loans is not so critical provided you have a correct and reasonable approach. Indeed, with a rational attitude, they can sometimes help a lot. For example, if there are several days left before the salary and the finance stock is close to zero. Another similar situation can be attributed to sudden illness or car repair. However, if you want to apply for a personal loan, you must remember several significant drawbacks.
- increased interest rate. In terms of benefits and overpayments, personal loans are much inferior to other types of loans. It will be much cheaper to apply for a personal loan in a bank than in microorganisms (especially if you provide proof of income). But it takes a lot more time and effort;
- possible technical failures in the operation of the sites of loan companies: it is sometimes impossible to enter your personal account or there is an error in the system during the payment of a personal loan. This can also cause a lot of inconvenience when it comes to online loan;
- Hidden commissions or the imposition of unnecessary services: Often people in a hurry read the contract out of attention or do not do it at all. There may well be hidden commissions and the final amount will be much higher than originally stated. This leads to delays and the formation of significant debt;
- they can also charge services: this is most often some kind of insurance or credit history improvement on a paid basis. When closing a debt, all banks and MFIs are required to send information about it to the credit bureaus free of charge.
- small loan amount. This is because if you need hundreds of thousands or a million dollars, personal loans won’t work for you. The essence of microfinance is to deal with urgent tasks that require small amounts of money.
- short term. The same goes for the period for which the money is issued. Usually it can be up to 30 days, and in some cases it can be up to 4 months.
In general, there are serious advantages and disadvantages. But it is obvious that when you weigh the pros and cons, a client with financial knowledge can qualify for personal loans.
Making a personal loan in microorganisms requires an approach no less reasonable and prudent than lending in banks. Personal loans have their pitfalls. In addition, the electronic format of the loan agreement and the code sent (received by SMS) are similar to the usual ones. Yet they have the same legal effect.