subject: Everything You Need To Know About Easy Personal Loans [print this page] Personal loans are an ideal way to make arrangements of finance to meet various expenses or buying something significant. The word personal loan has broader term more than any other type of secured loan such as housing loan, vehicle loan, educational loan, or gold loan (in terms of a secured loan). A personal loan is different from the above mentioned type of loans because of the fact that personal loans are not secured loans, but they fall under the category of unsecured loans.
They come under unsecured loans because in case of personal loans no collateral or security is asked normally and hence it comes under the category of unsecured loans. As no security or collateral is attached to the loan, the emphasis is more on the repayment of the loan and hence the applicants income, employment, credit history are checked.
Income of the person is an indication of how much loan that a person can be given depending on the income.
Employment is also an indicator of whether the job of the person is secured or not. Generally, public sector, government sector and corporate sector employees are considered for giving personal loans.
Credit history is perhaps the most important of the all the factors. Credit history of the person indicates whether or not the applicants history of payments is good or bad. If the applicants credit history is not good, then he or she is not given any loan. Even a small incident like cheque bounce can have a negative impact on a persons ability to raise personal loan.
These are the major and important things that are looked by banks while forwarding personal loans. The personal loan rates of interest charged by banks stands between low to moderate level and such a loan is considered to be best personal loan.
On the other hand, people can also find other sources of personal loans such as private financial companies and money lenders. These private concerns and money lenders may not check for all the above mentioned criteria on stricter terms. They would give out personal loans to people and would charge high rates of interest. In the past several years, many such cases have been noted of private financial concerns and money lenders charging exorbitant personal loan rates of interest. There have also been cases of these private concerns and money lenders for the methods that they follow during the process of loan recovery. So, to be on safe side, it is better to apply for loans from banks, because banks do not follow such illegal methods of recovery and they do not charge high personal loan rates of interest. On the other hand, borrowers are given many options for easy payments with easy EMIs. Banks provide a time of 1 year to 5 years for repayment of the amount and only resort to legal methods for recovery. Thus a personal loan from banks can be considered as the best personal loan because of the seeming advantages.
On the other hand, today with so many banks available, one can look for several banks, compare personal loans and then apply for the best personal loan and get benefited by them.
