A personal loan is a loan that can be obtained whenever there is a need for money. Personal loans are readily available and lenders are always willing to offer such loans. Personal loans can solve many purposes. Whether you want to buy a car or pay for a holiday trip, a personal loan will fulfill your need.
You may take out a secured or an unsecured personal loan depending upon your requirement and financial position. You need to offer a security to obtain a secured personal loan. Homeowners can easily take out a secured personal loan because they can offer their house as collateral. Tenants can obtain an unsecured personal loan. Homeowners who do not want to risk their property may also take out an unsecured personal loan.
Although there is a risk of repossession of collateral in case of secured personal loan, yet they are very popular among borrowers. This is because of the benefits that they offer such as low rates of interest, flexible repayment terms, small amount of monthly installments, etc. Unsecured personal loans are also quite popular mainly because they do not require borrowers to offer collateral.
Personal loans can also be given to the borrowers with a bad credit history. The rates of interest on Bad Credit Personal Loans are lower than other types of loans. To obtain a bad credit loan at a reasonable rate of interest, you should go for a secured loan. Since a secured loan reduces the risk for the lender, he can afford to charge a low rate of interest on it.
Personal loans can be categorized as payday loans and bank signature loans on the basis of the loan period. Payday loans are short term loans and are repaid within one year. The loan period of bank signature loans is usually one year. A payday loan is taken out when there is an urgent need for money. It is taken out when the borrower expects to repay it within a few days. Its rate of interest is very high and therefore, it must be repaid as soon as possible.
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