What is a personal loan?
Personal loans are various types of loans you can borrow from a bank. These loans are typically for general purpose loans that you can use at your discretion for things like consolidating debt, pay for an unexpected expense, or pay for a small home renovation.
Personal Loan is an unsecured loan to meet your current financial needs. It is referred as an unsecured loan as there is no security against it. Personal loan has higher interest rates than secured loans like a home-equity loan, but you are not required to put up any collateral to ensure repayment.
The loan granted quickly to consumer for the purpose of personal needs, medical emergency payment, to support family, child education, to enjoy vacations or the house hold expenses durable like (Extension, Re-structuring, purchase electronic goods or house hold items etc. Which appose to business or commercial use basically these loans are either unsecured or secured by the asset purchased or by a guarantor.
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Benefits of Personal Loan
Personal loans offers you multiple benefits. Here are some of the most important ones:
Flexibility of use: Personal loans are multi purpose. This can be used for various different types of purposes, travel expenses, medical payments, urgent family support, purchase of ornaments/electronic gadgets or even for house renovation/car improvements.
Quick availability: Getting a personal loans in very fast and easy. In some cases, you can get the loan approved even within 24 hours. So
Easy documentation required: Normally, personal loans doesn’t require much documentation as compared to a home loan or car loan. Hence the processing time is quicker and faster.
No collateral or security required: No security/collateral is required to obtain personal loan and repayment for this is much shorter compared to home loan or car loan. Personal finance has less risk for the borrower comparatively, since if you are unable to repay the loan, your security is forfeited in case of other loans. As personal loans don’t need any security, your assets are safe. This makes this kind of loan attractive to those who don’t own any assets like car, home, shares etc.