Since COVID-19, personal loans have become more popular. People began taking out personal loans online to rebuild their finances. This is not the only reason, though. Banks also started giving out personal loans during this time because loan restrictions were eased.
There are a few types of personal loans that you can take out. To get the best personal loan for yourself, you must understand which factors influence the application and how much they influence it.
Why Personal Loans Became Prevalent After COVID-19
A personal loan is also known as a consumer loan. Banks give this kind of loan to people who need it for several reasons, including investing in their businesses.
COVID-19 caused financial instability in companies and in people’s lives. People lost their jobs when the pandemic was at its worst. Paying their basic utility bills had also become difficult. So, to ensure they had enough money to meet their needs, people began taking out personal loans online.
In addition, banks were also under a lot of pressure to meet their targets. So, they began giving out loans with varying rates of interest. People chose to take out personal loans when interest rates went down. This brought the banks and the people onto the same page.
Knowing what made personal loans so crucial during this crisis is essential.
Factors for Choosing Personal Loans During COVID-19
People choose to get personal loans online for a few important reasons. Among these factors are the following:
- HealthDuring COVID-19, health problems became worse than ever before. The cost of medical care went up. Health insurance plans only pay for a certain amount and help with certain health issues. In such cases, people opted for personal loans because, with a personal loan, they could use the money for any personal needs.
- Business LossWhen the pandemic showed up, businesses went into crisis. Due to the lockdown, shops and factories had to shut down, and they lost a lot of money. Business owners chose to pay their other bills with personal loans because it was crucial for them to keep their businesses going.
- Employment COVID-19 did not only affect self-employed people. People also lost their jobs because of it. Because of the lockdown, it was harder for them to find new jobs. People who lost their jobs, which were their only stable source of income, turned to online personal loans to meet their needs.
- EducationWhile the professional community had been hit hard by the pandemic, students also faced tough times. Some students found it impossible to afford education because of the high tuition and living expenses. So, students or their parents also chose to apply for personal loans online to avoid dropping out and wasting a year or more.
Benefits of Taking Out a Personal Loan
The coronavirus pandemic has severely affected India’s GDP. A personal loan is the best option when the economy is down and companies continue to lay off their employees.
Many lenders are providing funds to help with the financial and emotional strain brought on by the pandemic. Most of the time, these personal loans are given without the need for any collateral. There are many other unique benefits to taking out a personal loan online:
- Quick Processing:The processing time is minimal because personal loans are usually requested when a person is in urgent need of cash. Also, since these loans do not need collateral, the application process is quick and smooth.
- Variety of Offers:Each lender offers a unique selection of EMI plans and loan tenures for their online personal loan applications. Given the economic climate, interest rates are much lower than before. You can find a range of rates offered by various lenders in the market.
- Convenient:Most lenders now offer personal loans online. So, in addition to being quick, the process also consumes minimal time and energy. Also, online applications require no paperwork, reducing the hassle.
- Multi-Purpose:A personal loan can be used for anything. If a person has lost their job because of the pandemic, they can avail of a loan to pay for their basic needs until they find another source of income. A personal loan can also be helpful to small business owners. This form of financial aid might help get a company back on its feet if it has suffered losses during the pandemic.
- Because of the online nature of their courses, students need some additional funding to buy computers, tablets, and other necessities. A personal loan processed online can be used for all their needs, from covering fees and overdue loans to meeting sudden expenses.
How to apply for personal loans?
Here are the steps to follow to apply for a personal loan online:
- Visit your lender’s website.
- Create a new account or log in to an existing one to begin the application.
- Fill out the form with all your personal and professional details.
- Include details of your loan amount request based on your fiscal needs.
- Upload the documents (ID proof, address proof, bank statement, and payment slips) required to process your personal loan online.
After the application has been submitted, the lender will review it. If your request is sanctioned, the loan amount is credited to your savings account within hours.
Before applying for your personal loan online, you can use an EMI calculator to get a rough idea of the interest rate. A personal loan calculator makes it easier to understand how EMIs work.
All over the world, the pandemic has caused severe issues. Both people and firms faced huge losses. Personal loans online have been a saviour for those affected by the pandemic.
Anyone can get a personal loan from banks, online lenders, or credit unions. To learn more about personal loans, you can visit Piramal Finance. Make sure you also check out their other services and products.