What is Personal Loan?
Personal loans are diversified and easily available loans to cover the financial needs of individuals. It is a flexible financial product with varied rates, terms, and types for individuals having different credit profiles. These borrowings are convenient to access as collateral is not required, forming a common choice for different personal purposes. Banks, online lenders, or credit unions offer personal loans. The repayment period of these loans is between one to seven years. Personal loans have helped individuals manage their finances without headaches, from financing a dream wedding to covering medical emergencies.
Geeky Takeaways:
- There are different forms of personal loans: secured, unsecured, consolidation debt loans, and personal lines of credit.
- Lenders mostly offer Unsecured personal loans where they don’t require collateral.
- On the other hand, secured personal loans require collateral and they are offered with lower interest rates.
- Personal loans can be used for a variety of purposes including organizing a wedding, paying off medical debt, consolidating debt, or financing a home renovation project.
- The lenders offer interest rates on personal loans depending upon the credit history and other criteria of the borrower. A lower interest rate is offered to borrowers having a credit score of 750 and a CIBIL score of 850.
Table of Content
- Types of Personal Loan
- 1. Unsecured Personal Loans
- 2. Secured Personal Loan
- 3. Debt-Consolidation Loans
- Conclusion
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