A personal loan is one of the quickest solutions to any monetary requirement. You can get a personal loan in a few days or even hours, provided that all your paperwork is in order. This feature makes a personal loan more attractive as it gives immediate financial relief to needy people.

You can take personal loans for any purpose, such as buying a gadget, paying your medical or travel bills, financing your children’s education, etc. Almost all banks offer personal loans at the shortest time possible with attractive interest rates. However, you are not supposed to use the loan for any speculative activities such as betting. 

Unlike secured loans, personal loans do not require collateral. Collateral is an asset that you pledge to the lender as security. It could be your property, ornaments, or anything of value. Once you have repaid your secured loan, the collateral is returned to you. 

On the other hand, personal loans make it easier for you to avail funds from banks without promising any collateral; that is why such loans are slightly costlier than secured loans.

Many lenders require only a simple documentation process for personal loans. This makes it easier for consumers to get personal loans. In most cases, one must just give proof of identity, address, and income to lenders for getting personal loans. Personal loan applications are mostly processed quickly, and the disbursal of loans also does not take too long. Often banks offer pre-approved personal loans to their customers who have healthy and clean financial records. If your credit score is 750 or more, your chances of getting a personal loan are very high, according to BankBazaar.

However, it is essential to note that consumers should borrow as per their requirements and avoid borrowing beyond their repayment capacity. Delay or default in payments of personal loan EMIs can spoil your credit score.

As mentioned above, interest rates for personal loans are higher because they are unsecured, and banks take a bigger risk to disburse you the money without any collateral. Personal loans are a great financial product; that is why it is always a good idea to make the most out of them.

Taking a personal loan is a smart option, especially when you need the money to meet a particular need. Paying back this loan on time is one of the most critical aspects; therefore, you should check the interest rates duration and compare different financial institutions before making a final decision. 

Here is a list of 25 banks that are currently offering the lowest interest rates on personal loans of Rs 5 lakh for a tenure of five years and the indicative EMIs. Please note that the interest rates of personal loans may vary depending on your loan amount, tenure, credit score etc.