Personal loans seem to be an attractive option for many who want to get access to emergency cash in urgent situations. The biggest benefit of personal loans is that there is no credit check involved and the money is lent on the basis of job stability of a person and income. Though these loans can be hailed as ‘life saving’; there are plenty of disadvantages involved if you are not able to repay these loans in time.
Let us take an example of a person called Matthew Gomes, who work in a small-time company in the sales division. He applied for a personal loan because of an emergency problem. Due to his income, he immediately got the loan. However, by the next month; when he was supposed to pay back the loan; his company shut down and he was jobless. He did not have money on him to pay back the loan, and he was in dire straits. Finally, he was able to clear it with the help of a friend who loaned him the amount.
Though we say that personal loans are offered to people with bad credit; they should ideally refrain from taking them. The reason why they are having bad credit in the first place is probably because they have not been able to pay back their loan due to consistency in income. Lenders play safe and insist on a cap for the lending amount, which usually does not exceed $ 1,500
Borrowers now have limited options especially if they are in a bad credit situation. Credit cards are bouncing back to popularity because people have realized that this one is a lesser demon; they get a chance to pay the money over the period of the loan rather than quickly pay the personal loan in a month with exceedingly high interest rates.
Personal loans are usually unsecured and the money that is lent is in accordance with the income of the person. You can apply for personal loans online and get it quickly in a matter of 24 hours, but if you are not able to pay back in a month, you will have to pay almost double of what you’d borrowed. So, you have to exercise caution while applying for a personal loan.
It is not a bad idea to go for personal loans, but you should make sure that you have the ability to pay back the money within the next month. Also make sure you shop online for the best deals in personal loans and choose the one with low interest rates. Spending some time on research online can prove to be vastly beneficial because this can really help you find the best deal. You can go to an aggregator website that helps you compare the cost, benefits and interest rates of various personal loans and choose the one that you find attractive.