4 MinsFeb 3, 2023
To require money urgently and not have it — is a nightmare. That is why we work hard at our jobs to ensure financial security. It is what motivates us. We want to ensure that our family and loved ones never have to face such a situation.
But unexpected expenses can crop up. That is when personal loans can come to the rescue. Emergencies rarely announce their arrival and can have a devastating impact on finances. At times like this, having a financial backup to fall on is of paramount
Your salary may not always be enough to cover huge expenses. You could ask friends and relatives for an informal loan, and occasionally, they might be able to help. But when all else fails, personal loans can help deal with unexpected expenses.
Personal loans are designed to be collateral-free, multi-purpose credit lines. They can be used for a variety of purposes.
If you compare personal loans with other popular types of loans like home loans and car loans, you will notice that personal loans often come with a slightly higher rate of interest. This is because of the fact that you don’t need to provide any collateral for this loan.
Salaried employees, in particular, have an added advantage when it comes to personal loans. Even though these loans are collateral-free, the presence
of a stable job and a consistent monthly income adds to the credibility of the borrower. Lenders feel safer lending money to a borrower with a stable monthly income, since it reduces the chances of defaulting on loan repayment.
Another advantage is that as a salaried employee receiving monthly income in your Savings Bank account, you have an existing relationship with your bank. Additionally, if you have taken loans and repaid them in the past, you would likely have a good CIBIL score. This provides you with the opportunity to get an attractive rate of interest. Based on your good banking relationship and credit history, you may be eligible for a pre-qualified personal loan, at a competitive rate, which you can avail of anytime you need funds.
[Also Read: How To Choose The Best Personal Loan Lender]
Benefits of Personal Loans
1. They can be used for a variety of purposes
When you take a car loan or a home loan, the money that is disbursed is earmarked for a specific purpose. But with personal loans, you
can use the money for miscellaneous purposes. These could include medical emergencies, home repairs, or even a vacation.
2. They are collateral-free
Personal loans are unsecured in nature. For salaried employees, the monthly income will have an impact on the terms of the credit given. For example, if your monthly salary is ₹50,000, it is likely that you'll be able to secure a loan that has EMI less than your salary.
Because they are collateral-free, personal loans involve a higher rate of interest. The bank takes on a greater risk in this case. If you lose your job, for instance, you might start defaulting on your payments. The bank will incur a loss. The
higher rate of interest compensates for this fact.
Axis Bank offers competitive personal loan interest rates. The interest ranges between 12 and 21%.
3. They involve less paperwork
Axis Bank Personal Loans are designed for convenience and speed. No one has the time to spare these days. This is why a quick application process & minimal paperwork is essential. If you’re an existing customer of Axis Bank, you can even complete the entire process online in just a few minutes!
Axis Bank offers an interactive Personal loan EMI calculator that helps you calculate monthly loan repayments for better financial planning.
Find out more about personal loan eligibility online.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.