All You Need to Know About Personal Loans

Loans are nothing but money that is borrowed from financial agencies, banks etc. People are in need of loan due to an emergency situation so that they can make use of money obtained from bank to meet their needs. There are various types of loans offered based on your need. Personal loans can be availed for personal expenses. There are options for applying online loans which makes the loan process simpler. You can get to know more about the features of

The article below discusses in detail the features and benefits of availing a personal loan. What Is A Personal Loan? It is the money which is availed for credit from credit agencies, bank etc. The money can be for a medical expense, house renovation, wedding etc. The borrower has the complete freedom to use the money for any purpose as the banks or credit agencies do not monitor it. Personal loans comes with various features and benefits.

Features Of Personal Loan There are various attractive features of personal loan which makes it more popular among people. You need not pledge any collateral for your loan as personal loans are an unsecured loan. This feature is very useful for people who do not own any property of their own. It is also seen that you can spend the personal loan amount for various personal reasons and the banks do not set any standards or regulations on your spending. Unlike the housing loans where you must purchase or build a house, a personal loan does not govern you in the way you spend the loan amount.

Loan Amount And Loan Period You can avail personal loans ranging from few thousands to lakhs which are based on your repaying capacity. Banks evaluate the repaying capacity of the borrower and set a limit of the loan amount based on it. Personal loans are short-term loans ranging from one to five years.

Approval Of Personal Loan Various factors influence the approval of a personal loan. Approval of personal loan depends on the credit score of the borrower. You need to maintain a credit score of about 750 or more to avail a personal loan. Higher credit scores can make you eligible for a personal loan. Your current job is the main factor for the approval of loan. You need to possess a stable job. This is because personal loans are unsecured loans and hence the bank can trust you based on the work you do. See that you stay on the same job for more than a year before you apply for a personal loan. Bank also looks at your annual income before approving a personal loan. As the loans are availed without any collateral, you need to have a higher annual income so that you can avail a larger amount of personal loan. Banks also look at your EMI payment record which is a proof that you have regularly made your payments in the past.

Pros And Cons Personal loans can be availed easily, and the processing of the loan is quicker compared to other types of loans. The major disadvantage of personal loans is their high-interest rates. The above are the various features that you need to be aware of before availing a personal loan.