Living a comfortable life in the current generation is an expensive ordeal. It does not matter how much you earn or save. There are certain unexpected situations when you might require emergency funds.
Sometimes, your savings may help you deal with the situation. But, you may not have the cash that you require for the expenses.
In such cases, applying for a loan can help you fulfil your dreams or get out of a financial crisis. However, you need to repay the amount to the lender along with interest. Today, anyone can apply for a loan through instant loan apps.
There are different types of loans available. Every loan has its specialities. Let us look at the two different types of easy loans that you can get through an online loan app – Top-up loan and Personal loan.
Personal Loan
A personal loan is the most opted loan to address individual financial requirements. It is an unsecured loan, and the paperwork is very minimal. A personal loan usually doesn’t require any form of security or collateral. However, a good credit score is a requirement for a personal loan.
The lender doesn’t ask many questions about the usage of the loan amount, giving you the flexibility to use the amount as per your needs. You can use it for planning a vacation or paying emergency medical expenses.
Depending on your needs and your financial situation, you can avail a loan amount that suits your needs. Along with flexibility in usage of the amount, the repayment term of a personal loan is also flexible.
The tenure of a personal loan can range between one and five years. However, a long term also means higher interest. As the paperwork is minimal and no collateral is required, one can easily apply through a personal loan app.
Top-Up Loan
You may have already borrowed a personal loan, but may still require more cash. In such a situation, you can apply for a top-up loan through an online loan app.
You can add a top-up loan to your existing loan. It is an add-on facility offered by a lender to their current customers. The loan tenure will remain the same as the previous loan.
Top-up loan offers the same flexibility as a personal loan in terms of usage of the loan amount. A top-up loan requires minimal or even no documentation at all. The processing and disbursal process is also swift.
What to Choose- Instant Personal Loan or Top-up loan
When it comes to getting more financial support, you can avail of another personal loan. A personal loan is readily available and is almost instantly approved. However, you can also go for a top-up loan on your existing personal loan.
With a top-up loan, you will not be carrying the burden of another personal loan on your shoulders. The interest rates will most likely remain the same as the existing personal loan. You can even request for a lower interest rate if you have been following a good repayment track.
However, a personal loan has its advantages. Since a top-up loan is a secured loan, you may lose your property as well as your credit score in case of default.
Conclusion
Difficult times can come to us without a warning when we are least prepared for it. Hence, you may sometimes have to opt for a loan. Today, you can apply for one easily through loan apps. However, you must realize the differences between a top-up loan and an instant loan before applying for the right one.
