Features of Personal Loan

by Finway FSC Empowering People Financially

What are Personal Loans?

If answered from a layman's point of view, a personal loan is an unsecured loan that can be taken to fulfill any personal need. This means that if you need money to repay one loan, or finances to fund a trip, plan a marriage or any other legal and a personal need, you may opt for this instant personal loan. This loan is often rendered against a high rate of interest as there is no collateral involved in any form. Neither gold or property is given against the money the bank extends as a loan.

Features of a Personal Loan: The features of a personal loan does not change with the location. Personal loan in Delhi or one taken in Mumbai will perhaps have the same features across the boundaries of a country. However, since a personal loan can be taken from NBFC, that is a non-Banking Financial company, the rate may vary according to the location, but necessarily low.

The primitive way of managing finances: Just like in the old times when the money lenders existed largely, there was no collateral is given but the borrower often took the money at a high rate of interest, the fundamental of this hasn't changed. So if you opt for a loan from a bank or NBFC, the root is the same.

Interest Rates: Although the interest rates do not vary substantially, to an extent the interest rate is dependent on certain aspects. Besides, every bank has its own rate of interest. So if you have a good credit history, a consistent income, and an occupation that reaps money, your interest rate may be low. In a way, these are the criteria to set the interest percentage.

Tenure: The tenure for which you can take the personal loans varies from bank to bank. This may begin from 12 months and may go up to 5 years. Basis of your requirement, you are free to choose the repayment tenure.

Installment: Just like any other loan, this loan can also be repaid in installments. The installments are equal monthly installments but the interest may be variegated depending upon the tenure. For a longer tenure, the interest rate may not be high, but you end up more interest since it is spanned over years, as compared to short term.

The advent of the internet has made this very easy access to repay small payments.