5 reasons why a personal loan is better than borrowing from friends

When you need financial help, taking a personal loan from a financial institution is a better option than borrowing from friend. Read to know with IIFL Finance!

8 Feb,2022 13:03 IST 1058
5 reasons why a personal loan is better than borrowing from friends

Are you short of cash and don’t know where to get the money to meet your financial needs? 

The default option people resort to is borrowing from friends or family members. But that puts a strain on personal relationships, and it is recommended to keep relationships and monetary affairs separate.

In such instances, instead of asking a friend, you could reach out to a financial institution and apply for a personal loan. A personal loan works as an excellent financial tool as the funds borrowed can be used to meet multiple purposes, including debt repayment, home repairs or renovation, wedding expenses, travel costs, or medical bills. 

Availing personal loans has now become a quick and hassle-free affair. With IIFL Finance’s highly competitive rates of interest and quick disbursal of personal loans up to Rs. 2 lakhs in 10 minutes, why borrow from anyone?  

5 reasons to choose personal loans over borrowing from friends and family

Transactional Transparency
Unlike personal loans, unorganized borrowings do not come equipped with clear terms. There is no clarity on what the transaction is or the terms are. This may lead to you not settling the advance in the right manner and feeling helpless or embarrassed. 
It is possible to eliminate such occurrences by availing a personal loan from trustworthy financial institutions like IIFL Finance that live the philosophy of Seedhi Baat and communicate loan terms and conditions upfront. 

Predefined Repayment Schedule
Personal borrowings usually revolve around unspoken agreements, wherein repayment terms are silent. You either end up paying immediately or forget to pay altogether.
Personal loans save you this trouble as you are well-informed about your repayment schedules and the EMI amount you need to pay regularly.

No Hampered Relationships
When you borrow from friends or family, the borrowings are often interest-free. This means the lender is not earning anything out of this arrangement. The lender might regret lending money or need money themselves in the future and demand an unreasonable sum as interest or even ask for the loan amount back. 
You would never want your relationships to fall apart due to monetary misunderstandings, which is why availing of a personal loan is always a better option.
Legally Binding
A personal loan is disbursed based on a legal agreement signed between the financial institution and the borrower. The borrower cannot be forced to abide by any terms outside the contract. 
Unlike this, there is no written contract when money is borrowed from a friend or family member, which puts you at risk.
Avoid finding yourself in such situations by turning to IIFL Finance, where you can now enjoy express disbursals with minimum documentation that includes a selfie, ID proof, and address proof.

Free from obligations
Borrowing from a friend or family member keeps you indebted to them long after repaying the funds. You are constantly reminded of their favour, which means you need to help them whenever they require assistance. You can eliminate such obligations and awkwardness by availing of a personal loan.

Personal Loans – A safeguard against financial emergencies
As per the CARE Rating Report, the growth of the retail/personal loans segment stood 11.9% higher in July 2021 as compared to June 2020. IIFL Finance alone has successfully disbursed thousands of personal loans during this period to lend a helping hand to multiple households. As long as you have a stable income and a comfortable credit score, you can easily avail of a personal loan at a low-interest rate. 

Also Read : How Personal Loans Help in case of Emergencies

Click here to apply for personal loan with assured speedy disbursement.

Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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