October 7, 2018 0

Thinking of getting a personal loan? What do you need to know?

Thinking of getting a personal loan? What do you need to know?

There are different loans you can borrow from the bank. The personal loan is one of them.  You can borrow a personal loan for various purposes and as per your need. It’s depending upon your choice. You can use it to pay unexpected expenses that cross your budget or you can use it for some improvement of your house etc. Moreover, you can a personal loan from any bank at your emergency need. But the personal loan is more difficult to get rather than the credit card and have strict rules and regulation to get it. If you are thinking of getting a personal loan, here are the points that you can keep in your mind before getting it.

No Security

When you apply for the personal loan, the bank doesn’t ask any of your assets as a guarantor. So if are a defaulter, then the bank cannot take or seize any of your assets. That’s why it is difficult to get a personal loan. The lender cannot touch any of the assets that belong to you. They cannot take your home or car or whatever assets you have. They can just take some legal action against you or they can report to credit bureaus only or can hire a collection agency. Nothing more than that they can do against anything you.

There are two types of personal loan.

  • Unsecured
  • secure

The unsecured loan is depending upon your credit and your financial history. If it is ok then the only lender will let you borrow the personal load and if it is not then they do the secure one.

In this case, they ask some security against the loan like the lender will let you borrow the personal load against your fixed deposit and something like that. If you are unable to pay then lender claim the asset that you gave to the lender at the time of getting the loan.

Fixed amount you can get:

The loan is completely depending upon your credit rating and income. The higher your income, more loans you can get from the bank or the lender. There are certain ranges of the amount that you can borrow. Whatever your need is, how much money you will get as a loan totally depends upon the lender. You cannot get a personal loan many times. Remember, the personal loan is only for the emergency purpose.

Fixed interest rate:

The interest rate for the personal loan is quite higher than any other loan. But it depends upon your credit rating. The more rating means low interest for the loan. Lower interest is great that means you have to pay less money for the loan. The rate is little is also because maximum loans are without any assets. So the lender cannot get anything if you will be a defaulter. If you get the loan with the security then you can get the loan at a lower interest as well.

Where you can get?

If you want to borrow some personal loan but do not know where to get it then just go straight to the bank. They are the only reliable place where you can get your loan as per your need and with a genuine interest. But not only have the banks provided you the loan.

There are other lenders available in the market like consumer finance companies, online lenders etc. But before borrowing the loan from any lender rather than the bank, just go through their history and are they qualified applicants or not.

A personal loan is a decent option when you want some extra money for some particular reason. But there are some disadvantages as well. You have to pay extra against what you get. The most important thing is from where you are borrowing the personal loan. Before taking any action, talk to any bank and if you are getting other good deals rather than banks then make sure they are trustworthy,

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