What are personal loans?
Personal loans are unsecured loans that you can take from a bank or a financial institution to meet your personal needs. A personal loan is a debt that you are required to repay in installments as per the lender’s repayment tenure. Moreover, lenders charge you an interest for the amount you borrow which is often higher than other loans.
Being an unsecured loan, you are not required to submit any collateral or warranty in lieu of the personal loan amount. However, defaulting on a personal loan can adversely affect your credit score.
What can you take a personal loan for?
A personal loan has no end use and so you can use it for whatever purpose you want to. It could be used to finance the following purpose –
- Consolidation of debt
- Home renovation
- Medical expenses
- Emergency Situations
Every lender has different eligibility criteria to lend you a personal loan. However, as an overview they consider the following factors – your age, occupation, your income, the city you reside in and your capacity to repay.
Often there are different criteria for self-employed and salaried person.
Your eligibility is also determined by your credit score and credit history. While the amount of loan you get also depends on the city you live in.
Tips to help you get the best personal loan
A personal loan is beneficial when you want to solve your urgent financial needs. It is easy and simple to avail with easy repayment duration so that you can repay the amount as per your convenience. If you are planning to avail a personal loan, look at these tips to get the best deal.