Personal loans can be of great help if a customer is in need of a specific amount of money that can be repaid with fixed interest amounts every month. The loan amount that is not secured by any property of the customer is known as a personal loan. These loans are also known as unsecured loans. Personal loans can be of great help if a customer is in need of a specific amount of money that can be repaid with fixed interest amounts every month. The loan amount that is not secured by any property of the customer is known as a personal loan. These loans are also known as unsecured loans.
Benefits of personal loans:
• Customers with credit cards might be able to borrow considerably more loan amounts.
• The repayment of the loan will be made by a fixed amount that is paid every month along with a little interest.
• The interest to be paid against the loan amount is usually predetermined. Sometimes the amount can be increased as the customer delays to pay the interest and debt on time.
• The customer is liable to choose the duration to repay the loan amount completely. The duration of the loan might affect the rate of interest.
• The customer can combine two or more debts in a single personal loan, which might reduce the repayment costs.
• Interest rates on personal loans are comparatively lesser than other secured loans.
Features of personal loan:
A personal loan is usually taken by clients to manage any personal funds and other expenses, for example, renovating a home, vacation, or a wedding. A personal loan is not restricted to specific uses. The unsecured personal loans can be spent as per the customer’s wish without any kind of restrictions. Personal loans or unsecured loans do not have a specific range. The loan amount can vary from a few thousand to few lakhs depending on the credit score of the customer. The factors that affect the approval of unsecured loans are credit score maintenance, repayment of previous loan amounts, credit card balances, and your line of occupation. Annual income is also an important factor that affects the personal loan approval. There is no collateral for personal loans. Hence the banks and lenders consider the annual income and other sources of income of the customers.
The appealing features of personal loan are,
Complete flexibility of end-use:
There is no restriction on how the borrower spends the loan amount. Secured loans like a home loan or vehicle loan can only be spent on vehicle or home according to the type of loan.
Lack of collateral:
Personal loans do not require the customers to provide any property or asset as collateral security to the lender.