What is a personal loan?
A personal loan is unsecured loan it is does not require collateral or security and offered with minimal documentation.
You can use the funds from this loan for any legitimate financial need, like any other loan, you must repay it accordance to the agreed terms with the
bank. Normally this can include a few months to a few years in easy equated monthly installments.
A personal loan is an amount of money you can borrow to use for a variety of purposes.
You may use a personal loan to consolidate debt pay for home renovations, or plan a dream wedding, consolidate debt, children education, pay for
medical bill.
Personal loans offered by the banks, credit society or online lenders. The money you borrow repaid with interest.
Types of Personal Loans
Personal loans may be secured or unsecured a secured personal loan is one that requires some type of collateral as a condition of borrowing.
An unsecured personal loan requires no collateral to borrow money. Banks, credit unions, and online lenders offer unsecured personal loans to
qualified borrowers.
That can mean paying a higher interest rate for a personal loan.
How to use personal loan?
You are free to use the funds you get from a personal loan any way you wish –
- Home renovation
- Wedding
- Consolidated debt
- Children education
- Fund a holiday,
- Pay for medical bill, etc.
How do personal loans work?
A personal loan works the same way as most loans. Once you apply for a loan, submit the documents, the bank will checks your credit worthiness and
proceed for loan offer.
If you accept the funds are transferred to your bank account, you can use them any way you like. You must repay the loan in equal monthly
installments (EMI), which will depend on factors such as loan amount, tenure and interest rate.
- Interest rates on personal loans: Interest rates can range will depend on your credit history, tenure, income, occupation etc.