A personal loan is simply a type of debt which is commonly given out by financial institutions to help sort out any personal issues e.g.: buying a house, going on a family vacation, buying a car, upgrading the house [renovation] or even debt consolidation etc. Personal loans actually give individuals the ability of make financial purchases without having to worry of going through the trouble of saving at first before finally being able to apply for loans and have their loan requests are approved.
Types of personal loans
At the moment, there are different types of personal loans on offer by personal-loan.sg/. For instance:
i. Fixed interest personal loans: these loans are characteristic of fixed interested rates. This means that the set monthly payments remain the same for the entire term the borrower is servicing the loan.
ii. Variable interest personal loan: these loans have the variable interest looking very attractive at first since the initial interest rates are set lower than the fixed rates. Interesting thing is the bank is free to adjust the rates whenever there is any slight rise in the interest rate.
iii. Unsecured personal loans: these loans are not collateralized at all meaning that In the event that the borrower fails to pay up as agreed, the bank is left with absolutely nothing to reposes.
iv. Secured personal loans: these loans require some form of collateral. The amount of money given out in this case is usually a certain percentage of the total value of the collateral brought in. in this case, when the borrower is unable to keep up with payments as agreed, the bank is authorized to move in an assume full control of the collateral which was brought in.
Things you need to know before applying for a personal loan
It is very important to be fully informed and most importantly very careful when planning on applying for a personal loan. Some of the things that you should personally make sure are in check include:
i. Being fully aware of exactly what it is that you are getting into [what are the pros and cons of personal loans]
ii. How do you stand to directly benefit long term from taking such a loan
iii. Do you have control over your debts?
iv. Understanding the fact that the personal loan will only reduced repayments and very little or few increments
v. You should also be well informed about the consequences of the steps and decisions that you make as far as the loan is concerned.
vi. Find out whether there are any hidden costs linked to the loan
From the above, it is very clear that: personal loans serve as a guarantee for personal finance when need arises. What’s more, these loans require only a few hours in order to be processed a very short time and the repayment period are usually stretched [e.g. over 12 to 48 months] and very easy to manage. Remember, the size of the loan will always depend on a variety of factors and not a single factor e.g. collateral. This is for other loans which do not require collateral, other factors of equally importance are taken into consideration.