A loan is money borrowed from an individual or organisation to be repaid within a stipulated period of time and with a certain extra amount known as interest. Payday vippi come in various forms and can either be for specific purposes like home loans and vehicle loans or just cash loans to meet any contingency expenses. Whatever the purpose, taking loans without proper financial planning could lead to a lot of difficulties and complications. Also, if not repaid within the stipulated time frame, the excess charges and interest payable could snowball into a large amount.
Types of Payday Loans
With the entry of many private entities in the banking sector and the economic progress made by India, the market for loans for borrowers and lenders is large. Payday Loans for housing, commercial property and vehicles are the most common loans taken out. Many financial institutions and banks also give loans against gold. Most of these are secured loans. However, there are also loans that are unsecured, i.e., without collateral security. These unsecured loans also called payday loans are usually given almost on the same day. These loans are normally for low amounts and since they are given at a short notice without security, they attract higher rates of interest. Also the repayment time for these loans is not more than a month.
With little or no financial planning while taking loans, it is very easy to step into a quagmire. Keeping the balance between repayment ability and the amount of money borrowed is imperative. Borrowing excessively leads to taking more loans to repay the older debts, thus creating a viscous cycle which can get very difficult to get out.
Planning and saving is essential to financial well being. Investing in the right options and re-investing the returns will also give you the cushion and reduce the necessity of taking loans unnecessarily. Also, when taking a loan, it is best to approach a bank or a regulated financial institution and not private financiers.