Understanding Personal Loans And Interest Rates - Loan Trivia

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Wednesday, 23 December 2015

Understanding Personal Loans And Interest Rates

A personal loan is a mode of finance through which you can get access to money without waiting for months. The popularity of personal loans can be attributed to their advantages. So we will cover the benefits in brief before we learn how to get a personal loan approved.
  • No collaterals: The borrower doesn’t need to offer any securities in exchange for a personal loan.
  • Ease of accessibility: These loans can be secured quickly through banks and online portals.
  • All-purpose loans: You can use these loans for your personal wants and needs, whether it’s paying off medical bills or to take some time off work for a much needed vacation.
What is the interest rate for personal loans?

Interests for personal loans vary from borrower to borrower, depending on their credit score and the lenders own personal rates. The rate of interest for a personal loan is generally high as compared to home loans or business loans. This is due to the fact that personal loans are an immediate burden on the lender and they need to be compensated for it.

Traditionally, you would travel to the bank to apply for a personal loan. Well, that changes now. You will find several lenders online who offer a variety of loan packages with attractive features. Personal loans can be available with interest rates as low as 12% and as high as 25%.

How to get a personal loan approved

Personal loans can be attained in a swift manner as compared to business or home loans, and they require only small amount of your time. Let’s look at a couple of tips on how to get a personal loan approved:
  • Research: Begin your search for a personal loan by making a list of lenders who offer one. Get additional input from customer reviews to see if the lenders and their loan deals check out. Banks may be your first option, but you may find lower interest rates from other financial institutions online, credit unions, or keep an eye out for credit cards that offer cash in advance.
  • Stay within your limits: When applying for a loan take into consideration your ability to pay it back. Also, report your income accurately as this will determine the EMI you will have to pay.
  • Maintain a positive bank balance: Lenders take into account your previous bank statements before approving you for a personal loan. Ask your bank for a statement of your transaction history and verify if they are correct. Once that’s done, you are ready to apply for a personal loan.

When you have to make a payment in lump-sum that just isn’t in your budget, take a look at the financing solution provided by a personal loan.

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