Personal Loan: Definition, Types, And How To Get One
A personal loan can be a bridge you use to help you get through tough financial times. They are loans that are meant for your personal needs, not business or investment purposes. Personal loans have different applications and purposes but they all have one thing in common: the desire to finance your home, vehicle or some other form of credit that is listed as a need in your budget on your personal financial plan. Personal loan is a type of unsecured consumer credit. It is given to the users by banks and it provides financial support to individuals or businesses, which do not have any collateral to secure repayment of debts. Personal loans are available to those who have sufficient income and assets but they need a sum of money to fulfill their various needs. Learn what is personal loan and its types in the upcoming blog.
Definition: A Personal Loan is a loan that is given to a person, who needs money for paying off bills or other financial needs.
Types: There are different types of personal loans which include;
Personal Secured Loan: This type of loan is given to people with bad credit history. The lender gives the loan amount to the borrower and then the latter can use it to pay off his/her debts. This type of loan has low interest rates compared to others and it also offers flexible repayment plans as well.
Unsecured Personal Loan: This type of loan is given to people who have good credit history but don’t have enough cash in their bank accounts at present. They can take this kind of loan for paying off any kind of debt, including car loans, personal loans, etc.
How To Get One: You can apply online for a personal loan if you have a good credit score and you want to pay off your debts as soon as possible. You will need to fill out an application form on a site like LendUp or ZestMoney where lenders find customers who are looking for such services
Personal loans are loans for ordinary borrowers. These loans can be used for many purposes, including paying off debts and buying things that you need. There are many types of personal loan in india available, each with its own features to suit your needs and circumstances.
There are three main types of personal loans:
Short-term loan: This type of loan is with a term of three months or less at an interest rate ranging from 4 to 12 percent APR. Borrowers can usually get these loans through their bank accounts or credit unions, but they can also be obtained online.
Mid-term loan: These loans range in term from six months to one year, with interest rates ranging from 5 to 25 percent APR. Borrowers can get these loans through banks and credit unions, but they are also available online.
Long-term loan: Long-term loans range in terms from one year to five years, with interest rates ranging from 5 to 20 percent APR. Borrowers may be able to get long-term loans through banks and credit unions, but they may also obtain them online if they have access to a computer with Internet access.
Personal loans are short-term, unsecured loans that can be used to cover a variety of personal or business expenses. These loans are ideal for people who need money quickly and don’t have the ability to save up funds in advance.
Personal loan providers will typically offer fixed rates with flexible repayment options that allow you to pay back the loan over time without having to pay interest payments. When you apply for a personal loan, your lender will ask for basic information about your financial situation, including your income and credit score. This information will be used by the lender to determine how much money you qualify for based on your particular situation.
If you’re approved for a personal loan, it will likely be for a specific amount that is greater than what you would normally borrow from a bank or credit union. Lenders typically require collateral such as real estate or other assets in order to secure the loan and make sure that they get their money back if you default on the payment terms agreed upon when they issued your loan application.