Pros and Cons of Borrowing Money From Private Financiers
People apply for personal loans for their personal needs like, purchasing home essentials, going for holidays and many other things. These personal loans are provided by banks and other financial institutes, but the processing of traditional finance institute like banks takes time.
Sometimes, the situation arises in which we need money very urgently; it may be a medical emergency, urgent necessary purchases or any other emergency situation. In such type of situations, money is needed on urgent basis and hence we cannot wait for long approval process to be completed. Then, people tend to reach out to private financiers. The private finance providers in East Delhi are seen visited by many for their financial needs. Citing their popularity, let’s discuss about the pros and cons of borrowing money from them
- No credit check- When you apply for a personal loan at any bank or other traditional financial institution, the first thing they consider is your credit record. If you are having a good credit record, then its fine, but if your credit score is poor, then you will certainly face problems in getting loan from them. This is not the case with private financiers. They do not consider your credit history. They lend money to even those people who do not have any credit history.
- Quick approval- Personal financiers approve your loan within short period of time and money is transferred to your account as soon the loan is approved. Some of the private financiers in East Delhi even approve your loan within as less as 24 to 48 hours. This means that, you can get quick money for emergency needs.
- Less or no paperwork- When you apply for a personal loan in bank, you have to submit a series of documents. While private financiers get the work done with very less paperwork. Nowadays, they are making use of online application process and hence, there is no paperwork. This makes your loan application and approval procedure hassle-free.
- Alterable terms and conditions- Banks have their own terms and conditions, which they do not alter at any cost. Additionally, there repayment plans are fixed and you have to make arrangements accordingly. Whereas, private financiers can be flexible in their terms and conditions according to your needs and you can customize your own repayment plan suitable to your financial condition.
- Discounts for pre-payments- You don’t need to pay penalties for repaying your personal loan before time. In fact, you can even get discounts on pre-payment of personal loan in Delhi NCR.
With all these pros, borrowing money from private lenders can be proved as a risky affair. Let’s have a look at some cons of borrowing money from private financiers.
- High interest rates- The interest rates charged by the private financiers are very higher than conventional financial sources. They charge these rates on according to their own rules based on the term of repayment and no monitoring is done for the same. However, people accept these rates when they land in emergency situations.
- Harassment for recovery- If you don’t repay your loan in stipulated time, there is always a risk of getting harassed by some of private lenders. They can control your properties, take away your valuable belongings or make use of any other method.
- Not authorised- Government issues license to run money lending trade. Still some people run them illegally. If the lender is not licenced, it can be a risky thing to borrow money from them. So, when you apply for personal loan in East Delhi, make sure the lender has valid licence in order to avoid further problems.
Borrowing money from private financiers has many benefits and risks involved. Still, there are few financiers who are authorized and lend money with low interest rates. So, if you have no other option left or in urgent need of money or your CIBIL score is very low, private money lender will be a great option to choose.