Personal loan 101- What
You Absolutely Need to Know
By: Mansi gupta
Daughter’s marriage or her
studies? Son’s Ambition? Want a House makeover?
Stop worrying about ‘money’
to fulfill your cherished dreams now…
Avail the opportunity of ‘Personal Loans’.
Personal Loan is perhaps a man’s best friend in today’s world. ‘Personal loan’
as the name suggests can be for any personal reason. Such reasons vary from person
to person for instance a husband willing to give a brand new car to his wife on
their silver marriage anniversary, a father thinking of investing and setting
up his son’s business etc. thus personal loan can provide you instantly with the
required investment without any body’s help.
If you wish to take a personal loan, all you need to do is to be a little observant,
calm and prudently decide which bank or company to go for. Government as well
as private banks and companies offer the facilities of personal loans. The bank
or company that has less rate of interest usually tops the list. But rate of interest
is not the only parameter one adopts. Many a people also confide in the banks
that require less documentation and spontaneous service. So it is entirely at
one’s volition to fix on which bank/company to go for. The channels may also differ
in this regard like there are those who directly contact the bank/company for
this service or the ones who leave it upon their agents to do all the work for
them.
Broadly there are three types of personal loans-
· Secured
· Unsecured
· Line of Credit
The secured ones are those, which banks or companies keep some kind of security
with them – like your house, car and the like. If one is unable to repay the loan,
the security so kept is taken up or confiscated by the bank giving the loan. Such
loans can provide you with a handsome amount of money and a lower rate of interest.
Unsecured loans accordingly do not require any security token. They are fast as
compared to the secured ones. But they do provide with you with a comparatively
lesser amount of money and that too at a high rate of interest.
Line of credit refers to setting up of a limit to one’s credit. The companies
or banks make credit cards, which have a certain credit limit. The rate of interest
will be charged only on the amount you withdraw from the credit limit. You cannot
go beyond your limit to withdraw the cash.
So the rate of interest varies with the kind of loan you take. If you need a loan
without much delay, unsecured loans can be the best choice provided you can cope
up with the rate of interest so charged. If you want to make use of your loan
amount gradually at discretion, setting up of a credit limit can be favorable
idea. However, the methodology should be to know the rate of interest and the
tenure you think you will be able to repay the loan amount. Then calculate the
EMI or the monthly installments that you will be categorically paying to the bank
or company from which you will take the loan. The company, which will be giving
loan to you will beforehand inform you of how many monthly installments or check
bounces they can accept. Just make it sure that you do not exceed this number
for there can be serious legal repercussions. Thus it is advisable not to mess
up (cheat) with the bank or the company you take the loan from.
Remember, if you are careful and loyal, personal loan can be the best and a real
friend in need.
About the author:
Mansi gupta writes about Personal Loan topics. Learn more at http://www.personalloanhelp.com.
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