As the name itself suggests, the Personal Loan is offered to individuals on their personal capacity and not a Business Loan. This is a Loan offered by banks and financial institutions in a lump sum, and is repayable with interest, through monthly installments.
The specialty of this Personal Loan is the borrower need not specify the reason for the loan; or the purpose for which the amount of loan will be utilized. Therefore many people find this Personal Loan the best option, whenever they meet with any financial crunch or a major expense.
According to experts from a popular Insurance Agency, which is also arranging for different kinds of Loans, there are assorted types of personal loan plans online, as follows:
Bridge Loan – to clear a bigger loan and thereby come out of a difficult situation.
- Festival Loan – to meet the additional expenses arising out of a festival.
- Wedding Loan – to tide over the shortage of funds for a wedding plan
- Agriculture Loan – exclusively intended to help farmers, to face the expenses related to their agricultural activities.
Home Renovation Loan – taken for the renovation of your home without going for a Home Loan, for a longer period
Consumer Durable Loan – to get financial assistance in buying any Consumer Durable devices, gadgets, equipment and appliances etc.
For applying to avail a Personal Loan, basically the following factors are taken into consideration namely –
- Your employment or profession
- Earning capacity and loan repaying capacity
- Your age
- Your Credit Score
The advantages of a Personal Loan are –
- It is an unsecured loan – meaning you need not pledge any security or property, as Collateral
- Minimum documentation to prove your income and repaying capacity, to get the loan sanctioned
- Quick approval by the Financial Institution, and you can get money to meet any emergency
- Versatile usages – You can avail Personal Loan for any purpose, so far as you fulfill the eligibility criteria.
However, experts in the field caution you to take into consideration, the following facts about Personal Loan –
- Since this is an unsecured loan, the Interest Rate will be higher, compared to other loans
- Unless you pay back the agreed installments promptly, the actions taken legally by the Financial Institutions will be unpleasant. They can attach your salary through Court, and engage Collection Agencies, who will be bent upon extracting the money from you
- Apply for a Personal Loan only for utmost necessities, exactly like the home loan plans online
Finally, you can take the advice and guidance from well-known Insurance Agencies, and get a Personal Loan from the Institutions they suggest.