A personal loan is often seen as a bad thing. The common misconception is that taking out a loan means you are in serious debt and you need help with your finances.
In order to understand a personal loan, you need to first understand what exactly it is. A personal loan is a loan that you are able to take out from your local bank or financial institution.
Now that you understand what a personal loan is, what are the benefits of a personal loan? Here are four benefits:
- No Collateral Required
- Have Control Of Your Spending
- Speed Of Application
- Debt Consolidation
Number One – No Collateral Required
For anyone that is not keen to put up collateral for the loan, a personal loan is the right choice. Common loans, such as home and car loans, require you to put the asset you are purchasing as collateral.
Having a loan with no collateral required, ensures that you do not need to worry about losing your home or vehicle if you are unable to repay the loan.
Number Two – Have Control Of Your Spending
A personal loan, as the name suggests, is a loan that allows you to spend your money in the way you want to. Most loans restrict you in how you can spend the money, for instance: taking out a home loan, you need to spend that money on purchasing your home.
Taking out a personal loan is perfect for someone that wants to purchase a personal item, but does not have the cash available.
Number Three – Speed Of Application
Once you meet the lenders requirements, one usually waits between twenty-four and seventy-two hours (one to three working days). The requirements that you need to meet are: One, have a valid identification document. Two, earn a minimum of R2 500. Three, have an operational bank account.
Number Four – Debt Consolidation
While it is true that taking out a personal loan will only increase your debts. This type of loan is also the best way to get you out of debt. The reason for this is that you are able to consolidate your debt into one loan at one fixed interest rate that you pay over a shorter period of time.
In conclusion, if you are struggling with debt and do not know where to turn, contact your local financial institution and let them help you. Taking out a personal loan is as easy as 1.2.3!
I am Greg Jones, a person loans specialist and holiday lover. In my spare time, away from the office, I love nothing more than hitting the beach, playing cricket/rugby or going for a run. I find nothing clears your head faster than a good old fashioned run.