Thursday, January 8, 2009

What are Personal Loans?

Personal loans are loans for any personal use you may think of. These loans are known as personal loans due to the fact that the money is for personal use, such as buying an automobile or home improvement. Usually, lenders do not determine what you can spend your online personal loan on, so the loan can be used for almost anything. 

A Personal Loan cab be described as taking out a one time amount of money from a bank, building society or any other financial institution to finance the buying of a new car, make home improvements or even go on a luxury holiday.

 Personal loans are now a very common method of raising funds for personal use. Personal loan amounts vary from between $500 to $25,000. Usually you will receive the amount in one delivery The individual obliges to make regular repayments, usually on a monthly basis. A portion of the amount you repay will go towards servicing the loan and the rest of sum will be used to pay off capital and eliminate the outstanding debt. 

Personal loans are paid monthly and have a fixed interest rate. Usually personal loans are offered by banks, financial institutions and are available in many different ways varying in size, period and use of the loan. It is crucial to ask for the APR (Annual Percentage Rate) of the different lenders so that you can make a comparison search to get the best interest rate.

 Interest rates vary between the different lenders. There are lenders who lend to individuals whom they regard as a 'safe risk' and these individuals will be offered lower interest rates. 

A personal loan could be a good alternative for you if you are interested in borrowing money for between one and five years and is especially good if you have other debts that you're looking to consolidate into one loan in order to reduce your overall monthly payments. 

Personal loan can be divided into two: the secured and the unsecured. 

With unsecured personal loans you will normally make payments on a regular basis to the lender who, if you do not make the payments, will take legal action to obtain the outstanding money. A secured personal loan is one where the lender will ask for collateral against the amount that you borrow, very often your home, which would be transferred to the lender in the case you do not make your payments.

1 comment:

Anonymous said...

It used to be that you would have to detail for the lender how you planned on spending every cent of the loan before they would decide whether or not they would lend. Now, your business is your business and all lenders care about is whether or not you have the means and security to repay.

Payday Loans Bones
http://www.checkcity.com

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