Do you want to buy a car, finance your home bills or even take a vacation and you do not have sufficient savings to meet this needs and obligations? Relax, because personal loans are available to any qualifying borrower in financing these and other personal needs.
Personal Loan Types
Personal loans allow you to meet your financial obligations and commitments with ease even if you don’t have sufficient funds to do so.
Most Financial institutions have a variety of personal loans. There is the fixed interest personal loan where the borrower pays constant monthly installments throughout the term of the loan. On the other hand, a borrower may opt for a variable interest personal loan which appeals to most people at first because of the lower initial interest rates as compared to the fixed rates.
The catch for the variable interest rate personal loans is the fact that banks or other lenders can adjust the rate depending on the prevailing market interest rates. This means that if the market rate is high, the lender might increase the rate to your disadvantage making your monthly repayment amount to rise.
Secured and Unsecured Personal Loans
Lenders also provide unsecured personal loans whereby the borrower is not required to provide any collateral to back the issued loan. In this case, if the borrower fails to pay, the lender will not have anything to possess in a bid to recover the money back. Lenders also issue secured personal loans which requires the borrower to back the loan amount with some typical collateral like a car, shares, etc.
The collateral value is usually higher than the loan amount to allow a full recovery of the loan amount, incase of a default, even if the collateral is sold at a through-away price. In case the borrower fails to pay, the lender is free to possess the collateral.
The qualification of any of these types of personal loans will be solely determined by the lending institution or body.