Personal loans should be last resort of financial assistance as the interest rate on these loans is higher. Even if the loan is taken, it is always suggested to repay it as soon as possible.
Indians normally invest in gold and they always have gold at their disposal. These days banks and other financial companies are offering loans on gold for a less interest rate. The amount taken in this form can be used to pay the personal loan. Gold is constantly not used, so it can be a great asset to get money and repay outstanding loans.
People who opt for loans are always under the assumption that if the loan is taken for a longer duration then the equated monthly installment would be less. The longer the loan period the higher would be the EMI and the interest rates would be accumulated. Loans should be taken for short periods and should be repaid whenever there is money at disposal. Trying to delay loan repayments would only lead one into bad credit. This would also curb them from applying for any further loans in the future.
Personal loans are easily available with any bank. Some banks have attractive offers too. However it is always better to stay away from personal loans if possible. Instead of personal loans, apply for short time loans which can be repaid easily. If there is a fixed deposit or shares, it is always a good option to sell it than go for a personal loan.
Family and friends can also be a source for seeking financial assistance if the help required is for less money and for a brief period. Personal loans would only exhaust one of their savings and the burden of loan is always leaves stress.
Personal loans can be opted for if one is sure to get some money in the near future which can repay the loan. For example, the fixed deposit term is close by however there is a medical emergency which has to be met immediately. Then opting for a personal loan makes sense as the amount from the fixed deposit can be used to repay the loan.
If taking a personal loan is the only option, the applicant should ensure that a thorough research is done on the options available in the market. Some banks offer attractive schemes on personal loans and the interest rates would also be low. So applicants shouldnt hastily go in for a personal loan. Depending on the need the amount for the loan should be chosen with the right bank.

Personal loan is a good idea to deal with short-term financial crisis. People, who are in urgent need of money, prefer personal loan because getting it is easier than other kind of loans. You can pay your college fee, buy a car, pay hospital bills, etc. with the help of it. However, everything, which is considered good also, has some bad effects and same is in this case. Personal loans do have some pros and cons that are listed in this article.

Advantages

* Availing a personal loan is much easier than other kinds of loans.
* Getting it does not require any kind of security.
* While applying for the it, you can direct contact with the loan provider (bank or private loan provider), which means you do not need to waste time with agents.
* It provides you easy repayment modes. You can repay the loan amount in maximum of 60 months.
* You can easily get a minimum of 10 thousands to 10 lakhs INR as personal loan to fulfill your requirements.
* It is quicker than a credit card.

Disadvantages

* As there is no security required for availing personal loan, eligibility criteria for getting it becomes tough than of other types of loans.
* Banks and private loan provider are most strict pertaining documents availability as they are taking risk of lending money without any security.
* Identification checks are hard and there is no compromise in the identification proofs. You need to bear high interest rate. Depending on the loan amount and your relations with the loan provider, the interest rate can be in between 12 % to 30 %.
* You have to pay high service charges.
* You have to bear high penalty charges in case you delay the loan payment.
* You have to face tough capability check. If you are working with a reputed company then getting a personal loan becomes easy than the person whose organization does not come in the approved organizations list of the bank or loan provider.

Besides the fact that interest rate in personal loan is much higher than of any other loan say home loan, educational loan, etc. but people still prefer personal loan because it helps them come out of the short-term money crisis.