A Personal Loan Is There For You Whenever You Need It
Written by: Vipul Jain
Personal loans are loans that can solve a number of purposes.
They are not taken out for a specific reason unlike other loans
that are obtained for a specific purpose such as home loans, car
loans, home improvement loans, education loans, etc.
You can use a personal loan for any of your miscellaneous
needs. You can even use a personal loan to make daily purchases.
However, you must avoid using personal loans to pay for daily
expenses. You can obtain a personal loan whenever you need
money. So many times, people need money urgently for a short
period of time. Your friends and relatives might not be in a
position to help you. Credit cards might not be helpful because
of their credit limit and high rates of interest. Personal
loans can be very helpful in these situations.
A Personal Loan can be taken out to build a credit
rating. Some lenders do not offer loans to those who do not have
a credit rating. Once you take out a personal loan and repay it
as per the loan terms, you will acquire a positive credit score.
This will help you in getting loans in the future. A personal
loan can also be used for debt consolidation. If you are finding
it difficult to repay your existing loans, you can take out a
personal loan to repay all your loans and consolidate your debt
into a single, low rate loan.
Personal loans are usually unsecured. However, some lenders
offer Secured Personal Loans. Such a loan is given against
a property. This is less risky for the lender since in case of
non-repayment, he can repossess the property. Unsecured
loans do not require a property as a security. The rates of
interest on Secured Personal Loans are lower than the
rates on unsecured personal loans. The rate of interest on a
personal loan can be fixed or variable. The rate of interest and
the amount of monthly payments remain the same throughout the
loan period in case of fixed rate personal loans, whereas they
keep on changing in case of variable rate personal loans.
About The Author: The author is a business writer specializing
in finance and credit products and has written authoritative
articles on the finance industry. He has done his masters in
Business Administration and is currently assisting Loans11 as a
finance specialist.
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